Table of Contents
If you’re looking to start or expand a veterinary practice, you’ll likely need financing to cover your costs. Many lenders offer loans that are specifically designed for veterinarians who need capital. These veterinary practice loans can help you pay for major expenses, whether that’s buying equipment, renovating a facility, or covering working capital while your practice grows. There are several types available, including Small Business Administration (SBA) loans, conventional business loans, and equipment financing.
Here’s a closer look at your options for veterinary business loans, including how they work and the steps you can take to apply.
Key Points
• Veterinary practice loans provide veterinarians with capital to cover major expenses like equipment, facility renovations, and working capital.
• There are several vet practice financing options, including Small Business Administration (SBA) loans, conventional business term loans, and equipment financing.
• Borrowers can use these loans to start or purchase a clinic, buy real estate, acquire equipment, hire staff, market their practice, or refinance existing business debt.
• Lenders typically evaluate credit score, debt-to-income (DTI) ratio, revenue, time in business, collateral, and professional background when determining loan approval, interest rates, and terms.
• Comparing annual percentage rates (APRs) across multiple lenders can help veterinarians find competitive rates and repayment terms that align with their long-term financial goals.
How Veterinary Practice Loans Work
Veterinary practice loans can give you access to capital for business expenses, which could include starting or expanding a practice, investing in marketing, or buying technical equipment. Some veterinarians also take out loans to refinance or consolidate existing debt.
Your interest rates, terms, and loan amount are based on several factors, which generally include your credit, revenue, and time in business. Since rates and terms vary by lender, it’s wise to shop around and compare veterinary loans from multiple sources.
Loan Amounts and Terms
As a type of small business loan, a veterinary practice loan usually offers a lump-sum amount up front that you pay back over a set period of time in monthly installments. Loan amounts and repayment terms can vary widely depending on the type of loan and your qualifications.
Smaller loans may come with terms of seven or 10 years, while larger loans may offer longer repayment schedules. Some SBA loans may provide up to $5 million with terms as long as 25 years.
Fixed vs Variable Rates
A veterinary practice loan might come with a fixed or variable interest rate. A fixed rate stays the same over the life of your loan, so it’s easier to understand your total borrowing costs for each month.
A variable rate is linked to market conditions and can go up or down accordingly. A rate decrease would generally lower your borrowing costs, while a rate increase would make them go up.
If you have a lengthy repayment term, you may prefer the predictability of a fixed rate. If you expect to pay back the loan quickly and are comfortable with some risk, you might see savings from a variable rate, which tends to start lower than a fixed rate.
Types of Veterinary Practice Finance
There are several financing options available to veterinarians, including SBA loans, conventional business term loans, and equipment financing. Here’s a closer look at each type so you can decide which type of business loan might work best for your veterinary practice.
SBA Loans for Veterinarians
SBA loans are small business loans that are disbursed by lenders and guaranteed by the Small Business Administration. There are several SBA loan programs. Here are three of the most popular.
1. SBA 7(a) loans: These can go as high as $5 million with repayment terms of up to 25 years. SBA 7(a) loans can be used for a wide variety of purposes, including real estate, working capital, equipment, supplies, and refinancing existing debt.
2. SBA 504 loans: These are designed to finance major fixed assets, like the purchase of land, buildings, or machinery that will last at least 10 years. The amount of a 504 loan can go up to $5.5 million with repayment terms of 10, 15, or 25 years.
3. SBA microloans: These smaller loans go up to $50,000 with a maximum repayment term of seven years. They’re primarily used for working capital or to buy supplies, furniture, and equipment.
SBA loans can come with fixed or variable interest rates and potentially lower interest rates than are typically offered by some other lenders. However, the application often requires extensive documentation, and you may be waiting several weeks or longer for an approval decision.
Recommended: SBA Loan Calculator
Conventional Business Term Loans
You can also find conventional term loans from private lenders, such as banks, credit unions, and online lenders. These loans offer a lump-sum amount that you pay back over a set period of time. You can often choose between a fixed or a variable interest rate.
Rates and terms will vary by lender, so it’s worth shopping around to find one that meets your needs and qualifications. Some lenders may require a certain revenue or time in business, while others may be open to veterinarians who are just starting out.
These loans are often unsecured, meaning you don’t have to put up collateral. However, some lenders may require an upfront down payment or a personal guarantee stating you’ll pay back the loan from your personal funds if your business goes under.
You can use veterinary practice term loans for various business purposes, such as renovating a clinic, hiring more staff, buying equipment, or expanding your services. You might also explore loans to buy a business if you’re looking to purchase an existing practice.
Equipment Financing
As a veterinarian, you’ll likely need to buy specialized equipment like X-ray and ultrasound machines. Equipment financing can give you a way to purchase the equipment you need and pay it back over time.
Equipment financing is usually a type of secured loan that’s backed by the equipment itself. That means that if you fall behind on payments, the lender can repossess the equipment. Secured loans are often easier to qualify for than unsecured ones since they’re backed by collateral.
Recommended: Alternative Small Business Loans
What Can Loans for Veterinarians Be Used For?
You can use veterinary practice loans to cover expenses related to starting, running, or expanding your business. These could include:
• Starting a new veterinary clinic or purchasing an existing one with a business acquisition loan
• Buying or renovating commercial real estate or office space
• Purchasing diagnostic, surgical, laboratory, or other equipment
• Financing furniture, computers, inventory, and other supplies
• Hiring and training staff
• Marketing your veterinary practice
• Covering payroll and other day-to-day operating expenses
• Refinancing your existing business debt
Veterinary financing is flexible, so you can rely on it to support and grow your practice while you’re busy providing care to your animal patients.
How To Qualify for a Veterinary Practice Loan
The specific requirements to get a veterinary practice loan will vary by lender and loan type, but here are some common criteria among lenders:
• Credit score: Lenders consider your personal credit score and, if available, your business credit score when you apply for a loan. A stronger credit score can help you get approved and access more competitive interest rates.
• Debt-to-income (DTI) ratio: Your DTI ratio also plays a role, since lenders want to see you have enough funds available to pay back a new loan. Lenders generally prefer a DTI of 35% or less, though they may understand that veterinarians often carry a lot of education debt from veterinary school.
• Revenue and time in business: Showing consistent revenue and time in business is also helpful. However, some lenders offer startup business loans for new veterinarians who are looking to start a practice.
• Collateral or down payment: Certain loans ask you to put up an asset as collateral or make a down payment up front.
• Professional background: Lenders may also review your professional qualifications, such as your veterinary degree, licensing, and industry experience.
How To Apply for Veterinary Business Loans
While application processes can be different from one lender to the next, you’ll usually take similar steps. Here’s how to apply for a small business loan as a veterinarian.
1. Consider your borrowing needs: Evaluating your financing needs can help you figure out which type of loan would best suit your practice
2. Review your credit score: Find out where your credit stands, since it’s an important business loan requirement that generally influences both your approval chances and interest rate.
3. Compare loan types and lenders: Research multiple lenders and loans for veterinarians to find the best fit. Some lenders let you prequalify online, so you can check your rates with no impact on your credit score.
4. Fill out an application: Provide your personal and business details. Review all your information before you submit it to avoid any delays.
5. Provide the required documentation: Along with your application, you’ll provide any documentation the lender asks for. This may include tax returns, financial statements, and a detailed business plan.
6. Sign your loan agreement: If the lender approves your loan, you’ll get an official loan agreement outlining the terms and conditions. Read it over carefully before you sign so you’re sure you fully understand the financial commitment.
7. Receive your funds: The lender will send you the funds to use for your approved purpose. You’ll start paying back the loan on the agreed-upon terms.
The Takeaway
Veterinary practice loans can provide the capital you need to start or grow your veterinary clinic. There are a variety of loans available to you, including SBA loans, traditional bank loans, online business loans, and equipment financing.
Considering your financing needs and comparing types of business loans can help you determine the best loan for you. It’s always wise to shop around so you can find a competitive interest rate and repayment terms that work for your finances and long-term goals.
Ready to grow your business? SoFi Small Business Loans can give you fast access to the capital you need. Check your eligibility in minutes.
FAQ
Can a new veterinarian get a practice loan without an established history?
New veterinarians may be able to get a practice loan without an established history. Look for alternative small business loans that rely on other factors, like personal credit and a solid business plan, rather than requiring a certain amount of time in business.
How much does it cost to finance a veterinary practice?
The cost of financing a veterinary practice depends on your loan’s rates, terms, and fees. A longer repayment term may offer lower monthly payments but can increase your total interest costs. When reviewing your options, compare each loan’s annual percentage rate (APR) for a more complete picture of your potential borrowing costs than you can get from the interest rate alone.
Are SBA loans a good option for veterinary practice finance?
Small Business Administration (SBA) loans can be a good option for financing a veterinary practice. They can offer large loan amounts, lengthy repayment terms, and competitive rates. At the same time, SBA loans often involve a time-consuming application and approval process.
What credit score is needed for a veterinary business loan?
The credit score you need for a veterinary business loan varies by lender. Some online lenders have more flexible requirements, while conventional banks may have higher credit requirements. A “good” score of 670 or higher will typically make it easier to get approved than a “fair” or “poor” credit score.
How do veterinary practice loans differ from general small business loans?
Veterinary practice loans may offer higher funding amounts for specialized equipment and flexible repayment terms that work for your practice’s cash flow. Some lenders may also be more lenient when considering your student loan debt, as they may understand the typically high education loads that many veterinary students take on to earn their degree.
Photo credit: iStock/Hispanolistic
SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
SOSMB-Q326-097