Veterinary Clinic Feasibility Study in California

California's veterinary loans stand apart on size and on cancellation, measured against both the state's SBA record and veterinary clinics nationally. The median loan is $941,000, or 1.51x what clinics borrow at the median nationally; the middle half spans $396,250 to $2.0 million. Cancellation after approval reached 16.7% of FY2017 to FY2024 approvals, or 17.9% with undisbursed loans counted, above California's rate for all classes and above the class across the country. California leads every state for veterinary loans, 1 of 53, with 374 loans for $523.8 million in FY2017 to FY2026, though inside California the class places only 17 of 39, with a location quotient of 0.86x.

Large loans with almost no losses

Once funded, these loans have held. Of 181 disbursed in FY2017 to FY2021, just 0.55% have been charged off so far, and 0.00% inside five years, below both California's floor and the class nationally. The lender table shows where the size sits. Live Oak Banking Company holds 87 loans for $200.9 million, then Wells Fargo Bank National Association (30 loans, $38.8 million), PNC Bank, National Association (18 loans, $39.7 million), Banc of California (16 loans, $26.5 million) and JPMorgan Chase Bank, National Association (14). Under 504, Business Finance Capital (9 loans, $12.4 million), The Mortgage Capital Development Corporation (9) and CDC Small Business Finance Corp. (8 loans, $12.1 million) lead; the program accounts for 56 loans against 318 under 7(a). The franchise share is 0.00%. Los Angeles (81 loans), Orange (48) and San Diego (31) lead the counties.

Why approvals fall away

A high cancellation floor alongside a very low loss floor suggests that the risk in this market lies before closing, not after. Large practice acquisitions can fail on valuation, on a seller who changes course, on a competing buyer, or on equity the borrower cannot assemble. Annual counts have stayed in a band, from 30 to 57 loans, and FY2021 stands out with 57 loans for $99.8 million.

What a California veterinary study must test

For an acquisition near the California median, the study has to test the practice as it will run under the buyer. Demand rests on the active client base, visit frequency and the competing clinics nearby. Cost must separate goodwill, equipment, any real estate and working capital. Compute debt service coverage after paying a market salary to the buying veterinarian and to any associates needed to replace the seller's production. The business valuation and any real estate appraisal must be independent and agree with the price, since a gap between them can stop an approved deal from closing.

Veterinary lending carries no limitation line here. SBA files each clinic under the code its borrower gave, and the rates are floors.