Economic crisis having minimal effect on practice sales, loans
"I can't say what might happen over the next few months, but so far activity for us has stayed about the same. The only real challenge I have is finding good, saleable practices that are worth buying," says Dick Goebel, DVM, president of practice brokerage Simmons & Associates' Great Lakes division in Monticello, Ind.
Up to a third of practices on the market for some time may be virtually unsellable, Goebel says, depending on their location, type of practice and profit history.
But, in general, "When I asked the three lenders we use most often whether anything that's happened in the financial markets lately has changed business patterns for them, two said absolutely not - that nothing has changed - and the other simply dropped their fixed (loan) rate guaranty period from five years to three but otherwise terms are the same and activity is steady," Goebel says.
Two field sales managers for Matsco, a practice-lending arm of California-based Wells Fargo Bank, and a regional sales manager for Banc of America Practice Solutions, a division of Bank of America that makes loans for veterinary-practice acquisitions and expansions, had similar comments.
"Activity is normal for us. I'm doing plenty of acquisitions this year. Rates may be up a bit and credit a little tighter in places, but we're busy. Veterinarians are a good credit risk," says Jim Baum, field sales manager for Matsco's MidAtlantic region.
"We have money to lend. That hasn't changed in the last two or three months," says Tom Baker, Matsco field sales manager for the Midwest region. "Some traditional commercial bank lending may be pulling back from (veterinary) acquisitions or start-ups. The market is more conservative and cautious, but for us things are basically moving about the same."
Despite the overall credit crunch, existing veterinary-loan clients in good standing can even get short-term loans for emergency needs, Baker adds.
"Our business hasn't slowed at all. We've had more in the last two or three months than we had in the early months of this year," says Ian Widensky, Northeast regional sales manager for Banc of America Practice Solutions, who is based in New York City. We've even financed seven start-up practices in the region from Maine to Virginia."