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3 Reasons your veterinary practice may need finance

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Buying a practice

Often when a vet is selling a veterinary practice, they sell the business along with the building itself. In situations like this, a value is assigned to both the practice as a business and its premises: this is called the “going concern”. Veterinary practice deposits can be as little as 10% of the going concern value, and this means that a lender will often lend more than the value of the building, so long as it’s 90% or less of the going concern value.

Expanding a practice

Expansion into a second practice is more viable for vets than many other industries, as funding for the acquisition of a new building can potentially be done without a deposit. This will depend on the strength of the existing business and the affordability of the loan, but it is possible to borrow 100% of your loan; be sure to calculate your new practice’s projected performance.

Refinancing a practice

Again, it is possible to borrow up to 100% of a practice’s value when looking to refinance a practice, as commercial mortgages can be used to refinance a veterinary practice. You may wish to do this to reduce your interest rate or charges, or to raise capital, but the products offered don’t differ that much either way. The interest rate offered will usually be lower than other types of finance: the longer the term, the lower the monthly repayments, but a longer term does result in a high total cost of borrowing.

If you would like some further information on veterinary lending or would like a free quotation for your requirements, please call us on 01202 937880.

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