VeterinaryLoans.com

Breaking News January 19, 2012

Veterinaryloans.com announces a new and innovative lending product brought to you by one of our member-lenders.

100% financing on Commercial Real Estate.

Also applies to first time practice buyers too, even on 100% financing of practice and real estate packages. The loan is based on conventional lending terms and is not an SBA product. The loan offers long-term Fixed Rates up to 25 years. Surprisingly, the fees associated with this new product are unusually low. Total Fees assessed: 1% (includes appraisal). If these terms sound attractive, you should fill out a veterinaryloans.com loan inquiry form today.

By Scott Ginsberg

Next year is going to be the best ever for your business. But only if you enhance your company’s usage of the following three words: knowledge, reassurance and conversations.

1. Knowledge

The tendency is to hoard knowledge is a seductive one. It makes us harder to replace, enables greater leverage, increases promotability and gives us a competitive advantage. But a lot of the time, in those moments when we operate from a scarcity mentality, we act selfish with our knowledge. We avoid telling people what we know for fear of losing power. And then everybody loses. Like pushing a rock up hill with one eye over our shoulder, it’s not especially productive, it doesn’t contribute to the greater good and it rarely proves to be a worthwhile investment of time and effort. But thanks to the connective beauty of the Web—via blogs, social media, discussion boards, forums and other digital platforms—we’ve found a way to reverse the trajectory. With the click of button, we…. (read more).

Interest rates from home loans are at 40 year low.  Why aren’t commercial business loans following suit?  Simple, they are not based upon the same lending index, so they respond differently.  A commerical motgage is commonly based on yields of treasuries, swaps, corporate bonds or commerical mortgage backed securities.  Typically based on an index such as LIBOR.  Home mortagages tend to move more quickly and are influenced by other factors and indexes.  Often when bond rates (yield) goes up, so does interest rates.  Although commercial lending rates will move in the same trend as residential rates, they often will not move identically or with the same rate of change.

Tips on business credit by: Mary Goodman and rich Russakoff.

What do Walt Disney, Milton Hershey, and Henry Heinz all have in common? They all, at one time, filed bankruptcy. There are scores of famous people who have survived bankruptcy and gone on to become wildly successful.

That’s the good news. The bad news is that once it happens, it’s both a lengthy and expensive process to restore your credit.

It all starts with your score

Credit scores do more than just affect your ability to get credit: They also affect your bottom line.  (read more)

 Who will finance your practice purchase? The seller may finance part or all of the purchase, but usually you’ll need to borrow from outside lending institutions. Here’s what some top lenders in the veterinary industry say you can do to convince them to approve your loan.

1 Develop personal cash reserves. Do you have cash available for a down payment when you’re ready to buy a practice? Save, save, save. In today’s banking and lending environment, liquidity is king.

2 Maintain a squeaky-clean credit history. As a rule of thumb, credit scores above 675 are necessary to be approved for a loan. In fact, poor personal credit is the one thing that can stop ownership ambitions cold. Visit http://annualcreditreport.com/ to receive your free annual credit report.

3 Pursue a conservative lifestyle. This means refusing to accrue lots of consumer debt. But don’t despair about your student loan: Lenders understand this type of debt and it’s not always a huge factor in their decision. Also, mortgages that can be supported by sufficient cash flow and are reasonable when compared to income would not negatively impact your loan application. In some cases they can ….

USDA’s Veterinary Medicine Loan Repayment Program has funding for five food animal veterinarians in underserved areas of the state. One applicant will be accepted for Central Washington; one for Northeast Washington, two in Western Washington and one for South Central Washington.

Applications are due July 8^th. Visit USDA’s Veterinary Medicine Loan Repayment program website for more information and an application. 

http://www.nifa.usda.gov/nea/animals/in_focus/an_health_if_vmlrp.html

A revolutionary new change in veterinary lending is here - Buy-In Financing.  Have you been given the option to buy in to the practice that you work at, only to find you didn’t have enough money to pay for it up front and the seller didn’t want to offer all or any of the financing for you?  Now you can borrow money to buy into a practice, get the money from a commercial lender and pay the owner with the money from the loan.  Too often an associate has had to put buy-in aspirations on hold because the seller couldn’t/wouldn’t offer to finance the buy in or a substantial portion of it.  Today that is changing.  You can borrow money to pay the seller, buy a portion of the practice and eliminate the biggest road block - owner financing.  Sometimes an owner needs additional funds to pay off other debts or obligations and wants you to pay for the portion of the practice you purchase and do so up front.  Not all sellers can afford to provide seller-financing.  Lenders have been willing to loan money for buy-ins in the past BUT they wanted the seller to pledge the whole practice as collateral.  Sellers are resistent.  Why should they pledge the whole practice as collateral when the buyer is only buying a portion of it?  A new loan product allows buyers to borrow and eliminates the need for the seller to finance the buy-in.  Limitations apply of course but overall its one of the biggest lending announcements to come out in recent years.  If you want to buy-in, fill out the form and we can start the match process.

It has been problematic for veterinarians to get loan approval on two types of loan requests 1) no/lo practices (low profit practices) and 2) buy-in’s.  The first because the earnings/profit is low and therefore it is difficult to have enough cashflow to make loan payments.  The latter because sellers are resistent to pledge the entire practice as security for the buyer’s loan when the buyer is only buying a portion of the practice (buy-in).  There are new loan products being announced next week that will provide funding options for both.  This is very good news for buyers interested in solid, but low profit practices and for newly forming partnerships where the seller would like some cash, but doesn’t want to pledge the whole practice.  Veterinaryloans.com participated in a call last week announcing the new loan products.    Check with us for details on which lenders are offering these new lending products.

Loan rates are varying considerably in the 4th Quarter of 2010.  SBA rates are still historically low, with rates in the 5 to 6% range.  Conventional loans range from 6 to 9% for practice acquisitions, and in the 10-13% range for working capital.  Some equipment loans, effective lease rates, and higher risk borrowers will see rates in the 13%-15% range.  In general there is plenty of lending money available, with most lenders reporting a very strong year loaning money to veterinarians.

There are many advantages to owning your own business, not the least is certain tax advantages not available to non-business owners. (ie. W-2 Associates).  In fact owning a business allows you to use the tax system in ways non-business owners can’t.  Here is two examples.

1.  Buy A New Car

You or your corporation can claim up to $8,000 in bonus depreciation on a new (not used) car purchased and placed in service before midnight on December 31, 2010.

You add the $8,000 to the $3,060 luxury limit for a 2010 limit of $11,060. To get to this limit, you can use a combination of Section 179 expensing and depreciation. You reduce the $11,060 limit by personal use.

Example. If business use is 80 percent, then your limit is $8,848 (80 percent times $11,060). The dealer’s demonstrator vehicle qualifies as a “new” car eligible for bonus depreciation.

How does this help?  It can offset the same amount of income, reducing tax on that amount to zero.  Something that can’t be done with a non-business use vehicle.

Can’t I just deduct expenses as an associate driving back and forth to work?  Generally no.  Certain employer required driving trips can qualify but your daily drive to work and home does not.

Convert A Personal Vehicle to Business Use

Do you have a personal vehicle that you purchased new? If so, consider converting that vehicle to business use before December 31, 2010, to qualify it for 50 percent bonus depreciation, which is unlimited on the SUVS and crossover vehicles with a GVWR of more than 6,000 pounds; limited to $11,060 on cars with curb weights of 6,000 pounds or less; and limited to $11,160 on SUVS, crossover vehicles, and pickup trucks that do not have a GVWR of greater than 6,000 pounds.

Example. Dr. Smith purchased a new car in 2009 while he worked as an employee. He used the car for commuting to and from his job. He never used the car for business until he bought a practice in August 2010.

Because Dr. Smith purchased the car new, he may use bonus depreciation in calculating his self-employed car deductions for 2010. Thus, Dr. Smith’s 2010 luxury limit is $11,060 on his 2009 purchased car.  He could realize $3000 or more in taxes savings for 2010 depending upon his tax bracket and other deductions.

For more tips see www.bradfordtaxinstutue.com