No Money Down? No Problem

Optometric Management, Mar 2005 by West, Walter D

QUESTION Two years from now, I'd like to buy the practice where I'm currently employed. The practice is well-established with an excellent patient base. I'm a recent graduate with good personal credit but no cash to put down. Do I have any options for 100% financing, or am I just dreaming?

ANSWER: No, 100% financing isn't just a pipe dream. However, without any real estate, vehicles, valuable inventory or marketable securities, getting that loan will depend on your ability to generate and flow cash. Remember, you need enough cash to pay fixed expenses, staff salary and taxes, vendors and suppliers, and the bank note - before you can pay yourself.

Look for 100% financing opportunities with the Small Business Administration or local, regional or national banks. Don't overlook smaller local banks, as they tend to be more interested in small business loans.

Convincing a banker you're a good risk is a different story. Personal relationships are important in most business ventures, and I always try to work with bankers who are actively interested in my practice. Be prepared to educate your banker on what exactly what you need to run a successful and profitable optometry practice. What you get from a banking relationship depends on what you put into it.

Finally, think long-term. Stress that you're looking for a banker who's willing to build a lasting business partnership.

Walter D. West, O.D., F.A.A.O.

Brentwood, Tenn.

wwest@prismmcg.com