Funding options – money too tight to mention?

In the past decade, technological advances have resulted in a dramatic increase in the availability of specialist facilities to rival hospital diagnostics and care, but this all comes at a cost. Some households are struggling to pay for even the most basic treatments for their pets, such as worming and inoculations, and some are even delaying or abandoning these treatments altogether because they cannot afford them.

Although the majority of work undertaken is paid for on completion by the client, many practices are still struggling to pull together larger sums of working capital once running costs are covered.

Lowering costs may be some practices’ only option against competition, with many pet owners stating their most common complaint is the cost of fees. Given the chance, they would move to another practice if it offered them more competitive pricing.

The Office of Fair Trading states consumers are best protected by competition between practices, but what about those practices that simply cannot afford to reduce their prices without compromising their level of quality and facilities? Providing state-of-the-art facilities and treatments to rival the care humans receive in hospital may be the most favourable option to retain and attract new clients. But, realistically, how can this be funded?

The funding dilemma

Increasingly, many are finding independent finance houses are a far more efficient and effective funding solution, often providing financial packages banks simply won’t offer without collateral, such as property and even pension policies. Finance houses base their decisions on cash flow and capital assets, rather than liabilities.

So, what options are on offer to ensure a practice can update its equipment and services, while maintaining healthy competition with its rival businesses? No solution is straightforward.

The purchase of state-of-the-art equipment could enable a practice to stand out above its competitors, but can often prove expensive, without an immediate return. However, many financial lending houses offer hire purchase and a finance lease, which ensures income generated from the equipment or asset can match the initial outlay, which ensures no additional strain is put on cash demands.

For many practices, a loan of up to 60 months can be secured to employ new staff, fund training, or even facilitate a partner buy-out. An unsecured loan could open a number of doors for a practice looking to promote itself in a highly competitive market. For example, nonasset investment, such as marketing and advertising, is often overlooked as it does not provide an immediate return, but it could be the answer to publicise a practice’s services and help drive more clients.

The use of an “arm’s length” practice loan could ensure the cost of the investment is spread over time, meaning the income generated meets or exceeds the outlay.

Another major issue faced by vets is tax liabilities. Tax obligations are often a nightmare for practices, appearing at the most inconvenient time, but shortterm loans can be acquired strictly for vet professionals to cover these costs. VAT or tax liabilities can be offset over a period of time, and will ultimately ease cash flow – meaning revenue can be spent on the more important aspects of running the practice.