Where Should I Get My Financing?

We'll Help You Choose Your Lender Carefully

Any chiropractor looking to buy an existing business may have many questions about how to get the right financing to complete your transaction. Obtaining a loan can be particularly challenging for borrowers who are typically 25-30 years old, may or may not be married, may have children, may not own a home, and have little to no investments but does have a lot of student loan debt.

There are many financing options to fit your budget and personal needs. Financing through your local bank is a popular option which can include preferred lenders, certified or general Small Business Association (SBA) lenders, and non-SBA lenders. Which option is right for you? Learn about your local bank options below!

Preferred Lenders:

  • “Preferred” lending banks have done a certain number of transactions that have had little to no default on repayment. The federal government then gives these banks the authority to underwrite and approve the loan internally without sending the application to the SBA for final approval.
  • A vast majority (95% or more) of chiropractic loans are funded using SBA loans.

Certified SBA Lender:

With certified, or general, SBA lenders, the bank has the authority to start the transaction, approve to loan at the bank level and complete the underwriting. Then they'll submit the financing package to the SBA for final approval. The cons of certified lenders include:

  • Being extremely time consuming.
  • Dealing with the unknown. You are typically dealing with an underwriter at the SBA that you cannot communicate with, so the results can be unpredicatable.
  • You may not be able to apply somewhere else if denied. If your application is sent to the SBA and they decline it, the loan process is halted. You won't be able to apply with any other SBA lender for an extended time, perhaps as long as a year. In contrast to applying for financing with a preferred lender, if initially denied, you can go to any other preferred lender and pursue the loan elsewhere without any waiting period.

Non-SBA Lending/Conventional Lending:

Non-SBA lending means the bank will provide funding without the SBA being involved. Conventional lending in Chiropractic business transactions is rare. The SBA guarantees the bank repayment of a significant portion of the loan if the small business owner should default.

Occasionally, one will get a conventional loan (non-SBA), but the buyer will have to have sufficient collateral, such as a house, car, or investments, to get approval.

Carefully Choosing Your Lender Is Crucial

Make sure you ask the right questions before you decide on your lender. First, we recommend asking your banker if they're a preferred lender. If they say anything other than "YES," carefully reconsider if you want to use that lender, no matter how friendly they are or the personal connections you have to them. The SBA guarantee enables banks to provide people and businesses with funding that would not typically receive funding. At the end of the day, make sure you choose the right lender for you!

Contact Practice Brokers Inc.

With over 70+ years of combined experience, we work hard to help you purchase, sell, and consult all types of chiropractic offices. Give us a call at (952) 938-0092  for aid in your chiropractic clinic buying or selling.