One of the best ways to get approval for a veterinary business loan is to start preparing for it in advance. There are certain steps you can take in advance of applying for the loan that will increase your odds of being approved. There are between 28,000 and 32,000 veterinary clinics in the United States, and many of them got the financial backing that was needed with a veterinary business loan.
What is your personal credit score? It is important as your personal credit score defines you as a creditworthy person. Don't be scared off by high debt margins, as long as you have “paid as promised,” your personal debt will not put the loan approval in jeopardy.
A veterinary business loan is not based on your personal debt to income ratio like other loans are. It is based on the ability of the business to generate enough revenue to pay you a salary, cover your overhead, and pay back the loan.
Preparing for the loan means being prepared to answer questions about how the business will generate income and pay its debts. You will need a cost analysis to present to the bank. The analysis should include all projected expenses and all projected income.
It is important that you do a deep dive into how your business finances will work. There is nothing like being confident in your plan because you have crossed all your tee's and dotted all your I's when it comes to persuading a lender that you are a good risk.
Before you apply for the veterinary business loan, you want to make sure that you are solid on whether you will acquire an existing practice or you will start from scratch. Ultimately, the lender is not invested either way but the documentation requirements are different.
There are benefits to both options, but you want to figure out early on which option is best for your situation. You want to be able to support your idea to the lender if you need to.
If you have a five-year plan in place that includes owning your own practice, it is never too soon to get started preparing. The sooner you start preparing, the more ready you will be to apply and get approved.