Top reasons vets take out business loans
Starting or buying into a veterinary clinic is a major investment, so unless you already have capital on hand you may need a business loan to help you get set up.
If you’re starting from scratch you could use the loan funds to acquire and fit out your clinic or veterinary hospital with the specialised diagnostic and treatment equipment you need, install safe accommodation for your animal patients, hire skilled vets and vet nurses to your team, and run a marketing campaign to help you attract new clients.
Once your vet clinic is up and running, a business loan could also help you manage your cash flow, and cover major ongoing expenses such as insurance, rent or mortgage payments, maintenance and medical supplies, plus stocks of any food or products you sell to your clients.
Having extra funds behind you can increase your negotiating power with suppliers or enable you set up affiliation and referral programs with local pet stores.
It’s crucial that your practice keeps up to date with the latest treatment products and techniques, and you could use the funds from a business loan to invest in CPD for your vets and support staff.
If you’re seeking to expand your vet practice, you could a business loan could finance a move into a larger clinic, and enable you to hire more staff or advertise more widely to attract more clients.
What are the requirements for getting a business loan?
Getting a business loan can be easier than you think.
While you can still expect to be knocked back by the big banks unless you have a solid trading history, a top-rate credit rating and collateral to offer, there are plenty of alternative lenders out there willing to offer business loans to vets.
Each lender will have their own criteria when it comes to things like credit rating, how long you’ve been in business, and how high your turnover is. If you’re higher risk (e.g. if your credit score is low) you may still be able to get a business loan, although you can expect to pay a higher rate of interest to compensate for that risk.
The most important factor ALL lenders will look at is your capacity.
Lenders need to know that you will have enough cash – after all your expenses – to cover your loan repayments.
How to apply for a business loan
If you are applying to an alternative lender for a business loan, the process is usually quick and easy:
1Create a business case to check how much you can afford to borrow.
2Prepare your supporting documents – expect to be asked for:
3Choose your lender and loan product – be sure to shop around, because costs, terms and conditions vary. Be sure to find out about hidden fees and compare all the costs of each product, not just the interest or factor rate.
4Complete a simple online application form and upload your supporting documents. Most lenders will respond within days or even hours. Some will even give an on-the-spot decision.
Grow your veterinary clinicSee if you qualify
What options are available to vets?
There are several types of small business loans you could consider, to support or grow your veterinary clinic.
Unsecured small business loan
A short-term option, unsecured business loans are usually for between 3 months and 2 years.
You can use the funds for any purpose. Many lenders will let you set a repayment schedule to suit your trading patterns.
A specific-purpose business loan secured on the equipment you are buying, such as new veterinary equipment.
The term will often be tied to the lifespan of the equipment. You will not be able to sell or upgrade the equipment until you have repaid the equipment finance.
There are several types of business car finance you can use to buy your work vehicles, including car loans, hire purchasing and leasing.
While your work vehicles are under finance you will not be able to sell or upgrade them.
Business line of credit
A business line of credit is similar to an overdraft facility, giving you access to cash up to an agreed limit, often with the right to draw, repay and redraw funds as you need them.
You only pay interest on what you borrow, but there are often set up and admin fees.
Business credit card
Business credit cards are great for covering day-to-day expenses and making purchases, but unless you clear the balance each month the cost can be extremely high.
Before entering in to any business loan agreement, be sure to seek professional advice. It’s also important to ensure you understand all of the costs (including all fees). You can get a head start by using our business loan calculator.