Are you a veterinarian who is looking to take the next step in your career?

Are you considering branching out on your own and starting a new business?

Are you looking at buying an existing clinic?

Starting a new business is no simple task. Yet if you have the fire in your belly to be your own boss, it can be the natural next step in your career.

Growing or starting a business from scratch can be a costly process. So where do you start?

Financing a new vet business

We are going to introduce you to the two ways you can finance your new veterinary business. Debt and equity.

What is debt financing?

Debt financing is a fancy way of saying loaning money to build your business. A loan is taken out and you repay that loan over a set period of time at a set payment rate as either a secured or unsecured loan.

What is a secured loan?

A secured loan means you pledge an asset against the loan, whereby if you are unable to repay the loan, the bank can seize that asset. A secured loan is a good option if you have a poor credit rating.

What is an unsecured loan?

With an unsecured loan, you do not need to pledge an asset to secure funding.

What are the benefits of debt financing?

With debt financing, you are the one who is always in control of your business. You say what goes and what stays. You do not need to liaise with anyone external to your clinic about the way you run your business. The final say is down to you.

On a tax note, the interest you pay is tax-deductible which is a bonus come June 30.

What is equity financing?

Equity financing is where you give up a portion of the ownership of your business in exchange for capital. In other words, you bring on investors who will essentially own a portion of your business.

Some may be silent investors – happy to provide capital and sit back and enjoy the profits. Others may wish to be more personally involved. You may also look at crowdfunding as an alternate avenue.

Understanding equity financing

It is important to understand, that once you have co-owners on board, you will need to clarify what level of input they have in the running of your business.

Are you comfortable with others having a say in the way you run your clinic?

The benefits of equity financing

The main benefit of equity financing for a veterinary clinic is if you find an investor with knowledge/experience or a background in the industry.

They can be a great resource for building and growing your business. They may excel at business development and help you take your practice to the next level, to grow your customer base or focus on client retention.

Another benefit is the lower loan amount you have to repay. With the additional capital, you do not need to loan as much from the bank and therefore pay less interest.

Do note, that your investors take their share of your profits.

The downside of equity financing is the sharing of decision-making. All parties need to be comfortable with the final decision regarding investor involvement.

There is no right or wrong way to finance your business – there is only the right way for your individual circumstances.

If you’d like to chat to us about your options for financing your veterinary clinic, give our team a call. We are experts in assisting veterinarians purchase and manage their clinics across Australia.