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Finance: what does the profession want – part 3

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01 April 2015, at 12:00am

RAY COX of Medifinance concludes his reports on the current and potential financial requirements of the veterinary profession with answers to points raised by two practice owners

WHAT really struck me in my discussions with Gareth Cross and Henry Hartley of the Witten Lodge Veterinary Practice in Bideford, Devon, is the feeling that the more things change, the more they stay the same.

I have now been working with the veterinary and other health professions for over 40 years and despite huge technological advances, the basic need my company meets is still much as it was back then: to provide competitive finance with as little fuss as possible.

Of course we can dress it up with all kinds of clever product names, branding and slogans, but the need remains the same.

What has changed (and Gareth and Henry made this very clear) are the structure and what might be called the modus operandi of the profession. Vets have always been seen as a “safe bet” by the principal lenders (i.e. banks), but the safe bet parameters have changed somewhat since the Thatcher years.

Today, obtaining funding for the veterinary profession is still reasonably straightforward but, in the main, requires a more considered approach to specific requirements than simply asking “to borrow some money”.

So I’d like to kick off this final part of the series by doing a little push for “financial planning”. Anyone purporting to provide funding should be skilled in this area, but as you may have found to your cost, they may not have any veterinary profession expertise … and this matters. Let me explain just why.

Presenting your case

Let’s assume that your funding requirement is rather more than you can happily find from immediately accessible sources. You may want to extend your premises, invest in new equipment or buy into a practice.

Whatever the need, two things have to be borne in mind:

  1. The needs and risks are different and will be perceived and assessed differently by potential lenders.
  2. You will stand a better chance of getting the money, and getting it on favourable terms, if your case is presented in a way that demonstrates you have considered the financial implications within the framework of your business strategy.

In plain English, what we’re saying is you need to show the lender you’ve thought it through and your business/ career will benefit, indeed prosper, from additional funding.

We have considerable knowledge of the veterinary market and expertise and skill in preparing business and financial plans. Once agreed with clients, we will then source funding that meets the criteria we have established.

All of which brings us neatly on to the role of banks. Let’s be clear. We don’t compete with banks. What we do is understand our clients’ businesses and financial needs, then source the most appropriate funding. Generally this means talking to several banks (with whom we have excellent contacts) and negotiating on rates and terms.

In the main, banks like big ticket, long-term loans that are as secure as it is possible to make them. Needless to say, not every funding requirement meets every bank’s own criteria. Our job is to find the perfect match. We can also source funding and then bespoke “the package” to fit particular needs.

The key thing is getting to the heart of your business and finding finance that will help it grow. Sadly, if your funding is not geared to your business then it won’t grow … in fact it could destroy it.

Bad debts

Gareth and Henry highlighted bad debts as a problem for many practices. No vet wants to leave a patient untreated, but very often the client does not have the wherewithal to pay.

This may only come to light only when the necessary treatment is completed. The practice is then faced with the unenviable choice of taking legal action or writing off the debt.

We have an alternative that offers a truly viable solution. It’s “treatment plan” funding that provides the client (consumer) with easily affordable pay-back terms of between one and five years. For the practice there is a minimum of administration and red tape. Everything is done on-line either in the practice or, if the client prefers, at home. Authorisation is almost immediate.

It’s a win, win, win. The practice has its money guaranteed. The patient gets the treatment it needs and the client has easy access to competitive finance.

In my discussions with Gareth and Henry a number of points were raised that would not really come under the heading of “mainstream”. Funding for CPD, training and for staff vehicles were specifically mentioned and I want to confirm what I said at the time.

Health profession finance includes anyone and everyone who works in a veterinary practice. Obviously individual circumstances vary, but we are in a position to offer very favourable personal loan terms … again with a minimum of fuss and red tape.

We also have vast experience in the whole area of buying into practices. Gareth thought the incidence of veterinary nurses buying into their practice may gather pace and here too we are in a position to advise, guide and, most importantly, help you avoid expensive mistakes.

As I said at the start of this article, vets are still considered a “good risk” when it comes to obtaining funding. The key is ensuring that the funding is relevant, affordable and competitive.

And that’s where specialist knowledge of the way the market operates comes into its own.