Join us for Amplify’s virtual annual meeting on April 17.
To learn more and register to attend, visit the Members Annual Meeting webpage.

Veterinary Business Loans: Expanding Your Potential

Katie DuncanJanuary 14, 2022

Reviewed By: Amplify

Chihuahua at vet

If you own a veterinary clinic, there may come a time when your clinic’s growth hits a wall. You may find that you no longer have the capacity to take on more customers, add services, or improve the overall customer experience.

But it doesn’t have to stay that way! Thanks to expansion and acquisition opportunities, your veterinary practice can get back on the path to growth. Expanding a business is no small undertaking, however. In this article, we’ll break down the basics of what you need to know including the benefits of expanding and how to get the right veterinary business loans.

What are the benefits of expanding your veterinary practice?

As a small business owner, the decision to expand your veterinary practice is a big one. The process will undoubtedly take a great deal of work, which may leave you wondering, “Is expanding my established practice worth it?”

Here are some pros and cons to consider when making your decision.

Commercial Lending Solutions

Ready to take that next step? Talk to our Commercial team today.

Advantages of Expanding Your Vet Practice

Expanding your vet clinic or adding on by acquiring another practice can be a great thing for your business.

  • The capability to take on more customers: More space means that you can see more animals at any given time. Taking on more customers per day means an increased cash flow for your business.
  • More room to serve the specific needs of your existing customers: Perhaps you’re not interested in taking on too many more clients. More room is still beneficial for your existing customers, as you will be better equipped to meet their pets’ needs in terms of diagnostic and treatment capabilities.
  • Provide better customer experience: A cramped vet’s office can significantly impact a customer’s overall experience. More room will give customers comfortable space and allow you and your staff to give each animal the attention they need.

Disadvantages of Expanding Your Vet Practice

While growth brings new opportunities, it also brings new and bigger responsibilities.

  • More costs: A new building or addition to your existing practice isn’t the only expense you should consider. Think about how you’ll fill that new space. You’ll likely need kennels, more tools, and other equipment in each room. You might also need to hire more vet techs or staff to help you run the practice.
  • More responsibilities: A larger space or second office means that you’ll have more staff to oversee, more expenses to manage, and more maintenance and upkeep.

Funding Your Expansion with Business Loans

Businesses who want to expand typically don’t have all of the money they need to fund an expansion just sitting around in the business checking account. This is where the right commercial loan can help.

There are several types of loans that can be used to finance your practice expansion. Here are a few popular commercial products to consider.

Commercial Real Estate Loans

As the name implies, commercial real estate loans are used to purchase commercial properties— like a larger office building for your vet practice, or a second location.

Under the umbrella of commercial real estate loans, you’ll find even more sub-types, including permanent loans, which act as a first mortgage on a commercial property. Others, like blanket loans, are designed to cover the purchase of multiple properties, which you might consider if you want to open several branches of your practice.

Not all commercial real estate loans are the same, which is why it’s important to work with local commercial lenders to come up with a loan that fits your unique business needs.

Construction and Development Loans

Looking to start from scratch or add on to your existing vet office? A commercial construction loan might be the right loan for you. A construction loan is designed to cover designing and building a structure that doesn’t exist yet. Most business owners don’t develop and build their own offices from the ground up, but if you know the right people, anything’s possible!

Business Acquisition Loans

Sometimes the easiest way to expand your practice is by purchasing an existing one and creating a second location for your own. You’ll use a business acquisition loan for this type of transaction. Acquisition loans come in many different shapes and sizes, including conventional loans, revenue-based loans, and lines of credit. The terms and conditions of this type of loan will depend on what specific product you get.

Term Loan

A commercial term loan is a flexible business loan option. This type of loan isn’t specifically designated for real estate; there are fewer restrictions for what you can use this for. General characteristics of this type of loan include:

  • A consistent repayment schedule
  • A set loan term in which you must repay the loan amount, which is usually one to five years but can be longer or shorter
  • A fixed or variable interest rate

Because you can use the money however you see fit in your business, a term loan is great if you have different areas of expenses to cover, like building an office addition while also purchasing new equipment.

Small Business Administration (SBA) Loans

The U.S. Small Business Administration (SBA) has several loan programs that can help small business owners obtain the loans we listed above. There are three SBA programs, and each comes with its own set of intended uses and eligibility requirements.

  • SBA 7(a) loans: This is the most common loan program and can be used for anything from real estate and new construction, refinancing business debt, and purchasing equipment and supplies.
  • SBA 504 loans: 504 loans are specially designed for businesses that are purchasing major fixed assets, such as a new office building, that will help grow their business.
  • Microloans: These loans are smaller with a maximum size of $50,000 and are meant to help small businesses start up and expand.

Keep in mind that these loans aren’t actually funded by the SBA itself. These government loans are guaranteed by the SBA, but the funds are provided through various providers.

How you obtain these small business loans will depend on which loan you need. For example, you would apply for a 7(a) loan through your local lender who participates in the SBA program. You can obtain 504 loans from a Certified Development Company and you can get microloans through designated lenders.

If you’re not sure where to start, contact a commercial lending officer! They’ll have the expertise you need to get you started on a loan or point you in the right direction.

Searching for the Best Loans for Your Vet Practice

When looking for financing options, keep the following tips in mind:

  • Your financial standing matters: The better shape your business and personal finances are, the more likely you are to get approved for a loan with favorable terms. For instance, a strong credit score often means getting the best veterinary practice loan rates.
  • Shop around for bank offers: Want the best deal on your loan? Don’t go with the first one you see. Shop around and get a few different loan offers to compare.
  • Work with a local lender: It can be tempting to apply for loans online with big-box lenders, but you’ll be missing out on the advantages that a local bank or credit union can provide. You’ll want someone in your corner that has knowledge of the local market and will be there when you need guidance.

Expand Your Vet Practice

Expanding your veterinary office won’t be the easiest undertaking, but it will be one that will allow your business to grow to new heights. With more space, you’ll be able to take on more customers, make room to serve the needs of your existing clientele, and provide a better experience for furry friends and their owners alike. Harness the power of the right business loan, make the leap, and expand your potential!

You Have Options

Amplify’s flexible and experienced commercial lending team can help you find the right solution for your business.

Katie Duncan

Katie Duncan is a financial writer based in Austin, Texas. Her articles include financial advice for freelancers, homebuyers, and more. When she’s not writing, Katie loves traveling and exploring the outdoors with her friends and her dog, Poe.