Associate DVMs can often buy a practice with little or no money down. Here is how veterinary acquisition lending works and what underwriters look for.
Why Lenders Compete for Veterinary Borrowers
Veterinarians are among the lowest-default professional borrowers in commercial lending. Companion animal spending has proven remarkably resilient through recessions, practices generate cash rather than carrying insurance receivables, and licensed DVMs have portable earning power if a business struggles.
That track record translates directly into terms. Where a typical small business buyer might need a 20% down payment, a qualified veterinarian purchasing a healthy practice can frequently secure 100% financing of the purchase price, and often additional working capital on top.
The other side of that coin is competition. Corporate consolidators are actively acquiring independent practices, often at aggressive multiples. An independent DVM buyer wins on relationship and continuity, but only if their financing is fast and certain.
How Practices Are Valued and What Debt They Support
Most veterinary practices transact on a multiple of adjusted EBITDA, commonly in the 5x to 8x range for well-run single-location hospitals, with larger and multi-doctor practices commanding the higher end. Some smaller practices still trade on a percentage of gross revenue, typically 70% to 100%.
The adjustment work is where deals are made or broken. Add back the seller’s above-market compensation, personal expenses run through the business, and one-time costs, then subtract a realistic market salary for the associate DVM who will replace the seller’s production. That last step is the one buyers most often skip.
Lenders size debt to leave the new owner a genuine living. A common structure targets debt service consuming no more than 10% to 15% of collections, with the owner-DVM drawing production-based compensation on top. If the math does not clear that bar, the purchase price is too high, not the loan too small.
SBA Structures and Bundling the Real Estate
The SBA 7(a) program is the workhorse for veterinary acquisitions up to $5 million. It finances goodwill, which conventional lenders often will not, and it amortizes over 10 years for a business-only purchase. That long amortization is what makes the monthly payment affordable on a goodwill-heavy transaction.
When the seller also owns the building, bundling the real estate into the same SBA loan stretches amortization to 25 years on the blended note. That single structural decision can reduce monthly payments substantially compared to separate business and mortgage loans, and it eliminates future rent risk.
Above $5 million, conventional practice acquisition financing or a combination of SBA plus a conventional CRE term loan is the path. Angel Funding Group structures both and compares total monthly obligation, not just headline rate, since the amortization schedule usually matters more.
Preparing to Close in 30 to 45 Days
Get your personal package ready before you make an offer: three years of personal tax returns, a personal financial statement, your CV with production history, and a credit report you have reviewed. Buyers who are pre-qualified negotiate from strength and can commit to a real closing date.
Ask the seller for three years of tax returns, practice management software reports on active clients and average transaction charge, a staff roster with tenure and compensation, and an equipment list. Missing practice management data is the most frequent cause of delay in veterinary transactions.
Negotiate a transition period. Most lenders want the seller to stay 60 to 180 days for client introductions, and clients themselves care deeply about continuity. Structuring part of the consideration as a seller note tied to that transition aligns everyone and often improves loan terms.
Ready to explore your options?
Start your application online with no impact to your credit score, or talk to an advisor about the right structure for your business.