Ask yourself these four questions before you go to a veterinary lender

September 3, 2019
Brendan Howard, Business Channel Director

Brendan Howard oversees veterinary business, practice management and life-balance content for, dvm360 magazine, Firstline and Vetted, and plans the Practice Management track at all three Fetch dvm360 conferences.Brendan has proudly served under the Veterinary Economics and dvm360 banners for more than 10 years. Before that, he worked as a journalist, writer and editor at Entrepreneur magazine and a top filmed entertainment magazine in Southern California. Brendan received a Masters in English Literature from University of California, Riverside, in 1999.

One veterinary lender at HospitalDesign360 conference revealed some of the questions to ask before you lock in financing for that new remodel, renovation or new veterinary hospital building.

Make sure to get all your financial ducks (er, pigs) in a row before launching a hospital expansion. (fotomek/

If you think you're ready to secure financing for a veterinary project, Brei Silvia, VP of national specialty lending at BBVA Compass, has a few questions for you. You'll need the answers to these to get a handle on what you have before you move forward, as she explained to attendees at the HospitalDesign360 conference last week in Kansas City.

Lenders before layouts

A number of architects and other veterinary experts echoed Brei Silvia's advice during the conference: Figure out how much money you have for your project-in other words, get your financing secured-before locking in on layout and materials. “You could have beautiful plans, but we can't make those beautiful plans if you don't have enough money,” says Silvia.

Question No. 1: Do you understand how you derive your revenue? Your annual revenue comes from a variety of products and services you provide. Know the buckets that money falls into and how big they typically are.

Question No. 2: Do you have cash reserves? How liquid are you today-what do you have on hand to take care of any current problems as well as future ones? Yes, building projects come with contingency funds and you can score lines of credit to sit alongside building finance, but what's your starting point right now?

Question No. 3: What is your true cash flow? “Many doctors look at net income,” says Silvia. But you need to account for a number of noncash expenses that will cut down on that number. Check with your financial advisor to gain a truer picture.

Question No. 4:Do you need to expand? You might be really busy and bumping into your team members, but that could be a result of inefficiencies in your procedures. “It could be poor traffic flow,” Silvia says. She recommends you take a look at AAHA's Financial and Productivity PulsePoints and see how your revenue per square foot compares. Her ballpark, based on those 2019 numbers? In general, if you're under $350 per square foot, you're underusing the space you've got. If you're more than $550 per square foot, yup, doc, it's time to consider expanding.