With help from The Small Business Administration, my wife and I were able to achieve both of our dreams. My wife, Dr. Paige Phillips, had been working as an associate veterinarian for three years and as a relief veterinarian for two years. Her love for animals made it such that she had a difficult time working for owners of practices who, in an effort to save time or money, did not practice the best medicine possible at all times. It was very important for Paige to reach her goal of always practicing the best medicine and continually improving the lives of companion animals. The only true way to make this happen was to own her own veterinary clinic, and manage it accordingly.
From a business perspective, I had always wanted to own and operate my own company. With a background in finance, I was able to put together a comprehensive business proposal to purchase an existing veterinary clinic in West Milton, Ohio, and, with the help of the SBA, to secure the appropriate financing.
As we looked into financing the purchase, we came across several hurdles. Not only did conventional business loans have fairly high fixed interest rates, conventional business loans also required at least a twenty percent down payment. Even on the relatively small practice we had decided to commit to, that came to approximately $120,000. Most young couples do not have these sorts of funds tucked away this early in their lives, and we were no exception. Additionally, Paige had the burden of student loans, which far outweighed the salary afforded to a veterinarian of three to five years experience; and I would also need to quit my own job to relocate to West Milton and help with the initial transition as new owners. It was obvious that it would not be reasonable to attempt to finance our dreams through conventional business loans.
As we looked for alternate financing, a gentleman by the name of Sam Renta, at First Union Small Business Capital, discussed our options with us, including getting a loan that was guaranteed by the Small Business Administration. We had heard about "paperwork nightmares" regarding the SBA, but to our surprise, the process was very easy, and in the end, enabled us to acquire the business.
To secure the loan, we only needed to supply approximately 5.5% for our down payment, which came to about $28,000. This was much more manageable. Going through the SBA 7(a) Program, the SBA guaranteed 75% of the loan we received through First Union Small Business Capital. First Union was willing to loan us the money knowing that upon default, they would still receive 75% of the money back form the Small Business Administration. The SBA looked carefully at our plan, and was comfortable with a guarantee on the loan; thus, we were able to secure a loan with a sixteen-year term. We're now on schedule to pay off the loan in eight years instead of sixteen, and the variable interest rate of 10.5%, that we started with has decreased to 5.5%.
In summary, we could not have achieved our goals without the help of the Small Business Administration. It has only been four years since we purchased the business, and in that short time we've been able to grow the business by more than 15%, make a reasonable profit, and will pay the loan off in half the term. The reason this story qualifies for a success story, however, is that it has met the most important criteria; my wife, Dr. Paige Phillips, is now living her lifelong dream of improving the lives of companion animals to the best of her ability.
Thank you SBA!
"This article and the accompanying photograph do not constitute or imply an endorsement by SBA of any opinions, products or services of any private individual or entity."