Buying a veterinary practice is a unique process, particularly if you’ve never bought one before. And although practice ownership isn’t for everyone, there are major benefits to owning your own practice. If you are interested in purchasing a veterinary practice, below are some tips to get you started.
Buying a Veterinary Practice? Follow These Tips
Buy at a good price. When buying a veterinary practice, make sure you buy at a good price. There are no substitute for a knowledgeable valuation expert such as those holding a CVA license and also members of the VetPartners Valuation Council. A good price can mean different things to different buyers–good to a corporate consolidator might mean 9.5x EBITDA, whereas an individual buyer would pay a maximum of 100% of Gross Revenues to ensure a positive cash flow. As attorneys our job is to assist you in ensuring the purchase price and purchase structure are the best deal for your particular circumstances.
Consider the loan terms. Not all lenders are the same. Veterinary specific lenders are always your best bet. Apart from interest rates, each can offer varying loan terms: Fixed rates, variable rates, loan terms of 10-15 years (25 for real estate), seller note requirements, and lending amounts without arbitrary caps (such as 80% of gross revenues). When determining your loan terms, it can be difficult to know which direction to take. Everyone has different goals, so you may want to consider which lenders can fit your needs. Your specific situation will dictate the type of loan that is best for you. We can help put you in touch with lending experts in the field that can meet your needs.
Enjoy today’s good interest rates. In the past, practice loans often ranged from 9 to 12 percent. Now, however, loans can be below 4 percent. If the current owner of a practice is willing to provide some or all of the financing, he or she may request a slightly higher interest rate. Again, the rate you negotiate is dependent upon your specific situation.
Buy soon. If you are seeking to purchase your own practice, there’s no time like the present to do so. Due to corporate consolidators entering the market, the supply of available hospitals for individual buyers is limited. We often tell our clients that there are now good deals or no deals, buyers rarely have the choice between two different deals. Remember, there is never a perfect time to follow your dream of opening your own veterinary practice. You simply have to make a decision and move forward. And with a team of veterinary practice attorneys on your side, you can rest assured that you’ll have all the resources at your disposal necessary to make your transaction a success.
Contact Our Experienced Veterinary Attorneys
There is no time like the present to purchase a veterinary practice, and Mahan Law can help you do so on a local, regional, and national basis through a network of co-counsel attorneys. Although buying a veterinary practice can be a complicated process, our attorneys have the experience, knowledge, and skills necessary for a successful acquisition. When you choose Mahan Law to handle your transaction, you can rest assured that we will protect your interests and help you achieve your objectives. If you want to begin your journey to practice ownership, please contact us today for a consultation.