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So far Live Oak Bank has created 219 blog entries.

What is Cash Flow? | Part 3

By |May 19th, 2015|

Manage Business Expenses

The first step in improving your cash flow is to manage the business expenses. If you are not doing so already, start tracking your spending. How much goes towards inventory each month? How about payroll, loan payments, and insurance? Keep track of the seemingly small things like dry cleaning and office supplies. By following your expenses month by month, you will see where your money is going and when.

In the same respect, carefully track your call volume and sales month by month. Industry trends and death rates will affect your bottom line, so it is important to understand your local market. Recognizing your revenue trends is vital to determining your business’s budget and whether or not you need to reduce costs in the future.

The next step in managing your expenses is to create a budget (and stick to it)! It will help you stay on track throughout the year. Since you will have tracked your spending, you can […]

Practice Financing: Expansion

By |May 19th, 2015|

What You Need to Know About Practice Financing

Increasingly, entrepreneurial veterinarians are becoming multipractice owners. According to the American Veterinary Medical Association, 42 percent of veterinarians are practice owners, and the number is rising. Financing an additional practice – an acquisition or startup – is easier than financing the first.

First, an owner usually won’t need to draw a salary from a second location, so all of the excess cash flow can be devoted to debt service. Second, a banker may be able to consider cash flow from all the owner’s businesses, or the global cash flow, when evaluating the financing of an additional practice. Strong cash flows from the owner’s existing business can support the acquisition or startup. For owners with a fair amount of equity in their existing practice, a bank can often offer 100 percent financing for the expansion.

Success Story By: Funeral Business Advisor

By |May 12th, 2015|

Jersey Memorial Group
A Ministry, Story Tellers – It’s Okay to Live, Love and Laugh

By: Funeral Business Advisor

David L. Hernandez Jr., owner of Jersey Memorial Group, is truly a self-made small business success story. His foray into the funeral profession and funeral home ownership is not typical.

David’s mother, Deborah, was his catalyst for embracing funeral service as his profession. She was a pastry chef for over 20 years as David was growing up. Deborah was seeking a second career where she could make a difference. She answered an ad from a Northeast Philadelphia cemetery to sell cemetery plots. “When she took that position, I was in middle school. At the ripe young age of 13, one of my first after school jobs was to go over there help out and chase geese off the graves. I would run markers back and forth in a golf cart. I thought I was the man! So for a number of years I was exposed to the cemetery side of the business. But over those years by watching funeral processions […]

National Small Business Week by Google

By |May 6th, 2015|

Small Businesses that are online grow 40% faster than those that aren’t. Google is launching an initiative called “Let’s Put Our Cities on the Map”, to make it fast, easy, and free for businesses to get online. Google has traveled to all 50 states where they’ve helped thousands of businesses. But there’s more work to do. Only 37% of businesses have claimed a local business listing on a search engine–that’s a lot of missing information. And with 4 out of 5 people using search engines to find local info like business hours and directions, it also means a lot of missed opportunities for local businesses.

Since Live Oak Bank is a small business lender, we are huge advocates for tools that help small businesses grow and succeed. To get started, businesses just need to create an online listing and verify their business for free with Google My Business.

5 Questions for a Lender in the Entertainment Industry

By |May 5th, 2015|

If you’ve been thinking of expanding, renovating, refinancing or seeking working capital for your Entertainment Center, now’s a great time to move ahead. Here are some common questions we hear as lenders in this industry.

Is there money available?

The simple answer is, yes! Many borrowers do not understand that you don’t need a down payment or collateral to expand, start construction or renovate. If your business has cash flow, a strong business plan, and you have good credit, we’ll help you achieve your goals.

Who is an ideal candidate for fec financing?

Live Oak works with business owners in the Entertainment Center space including FEC’s, Bowling Centers, Roller Skating Centers, Waterparks, Arcades and Hybrid Parks. Live Oak fills the gap in financing availability for those owners that have an established business and established cash flow, but may lack appropriate collateral to secure loans with conventional lenders.

Should we be expanding now?

Now is a great time to expand! With interest rates still near all-time lows, access […]

5 Most Common Questions from Poultry Borrowers

By |May 1st, 2015|

There are many questions that arise when one is considering an Agriculture loan with us. From when to start the building process to how to submit payments, we strive to be as clear and helpful as possible when working with customers. Here are the five questions we get the most, and the answers to them.

Q: Do I get the leftover money if construction comes in on a budget?

A: Yes. The amount will vary based on the original loan amount and whether we need to reallocate from the working capital line item to cover any construction over-runs. Though, it is common for borrowers to complete construction and walk away with working capital so they can pay any farm bills, buy new tractors, etc..

Q: How do the payments work to pay down the loan?

A: We get an assignment on the borrowers’ flock check, so whenever they get paid we get paid directly as well. This system is convenient for the borrower because they do not […]

5 C’s of Credit

By |April 28th, 2015|

What You Need to Know About Practice Financing

Whether you are seeking to refinance existing debt, acquire a veterinary practice, finance a succession, expand or remodel, a bank or lending institution will be interested in both your business and personal financials. To determine the risk associated with making a loan, a lender will perform a credit analysis.

Credit analysis by a lender is determined by the “5Cs”: credit, character, capacity, collateral, and condition.

• Credit: As history is the best predictor of the future, a lender will examine the personal credit of all borrowers and guarantors. Good personal credit is a must. Any problems must be thoroughly explained.

• Character: Lenders need to know the borrower and guarantors are honest and have integrity. Additionally, the lender needs to be confident the applicant has the background, education, experience, and industry knowledge to successfully run the business.

• Capacity (cash flow): The business should have sufficient cash flow to support its business expenses and debts comfortably while providing the principals salaries that will support personal expenses and debts.

• […]

What is Cash Flow? | Part 2

By |April 20th, 2015|

Determining Your Debt Service Coverage Ratio

The business’s cash flow is an indicator of the financial strength of the business.  A bank or lender will look at the cash flow of the business to help determine the borrower’s ability to repay a loan. Debt service coverage ratio (DSCR) is the cash available to service debt.

To calculate DSCR, you will take your annual net income and add back any non-cash expenses such as depreciation and amortization.  You will also add-back any interest expense – as the interest is a function of your financing activities.  This is called EBIDA (Earnings before Interest, Depreciation and Amortization).

Then divide your EBIDA by the total annual debt service for the proposed loan (the total annual principle and interest payments).  A DSCR of 1.50 indicates there is 50% more income than is required to repay all debt, or $1.50 available to pay each $1.00 of debt.  However, a DSCR of 0.90 would indicate there are only 90 cents […]

Top 5 Things to Consider in Self-Storage Construction

By |April 17th, 2015|

Investing in constructing Self-storage facilities is an important decision with many considerations. Historically, there were zoning restrictions that prohibited growth in certain prime locations. With changing regulations and unprecedented growth in the industry causing at or near 100% capacity for many facilities, some owners are choosing construction for continued growth. Here are five things to consider when planning a construction project for your facility.

Site Selection. Find the right location with the proper market. Consider sourcing multiple options to ensure suitable selection and opportunity. Also study visibility; can people see the business and know that is a viable option? Is it easy to access from the main roads? Is it close to a densely populated area?
Feasibility study. Understanding your potential market and cash flow opportunity is key in a construction project. Here you are trying to verify that the selected location is correct and also determine the amount of storage and product mix. What are the market’s current rental and occupancy […]

Practice Financing: Long-Term Financing

By |April 14th, 2015|

What You Need to Know About Practice Financing

The veterinary community is an evolving yet thriving industry with many opportunities as well as some challenges. Among the challenges practice owners often face is financing. Bankers want to lend money to good businesses; veterinary practices are good businesses.

Practice owners seeking to fund a specific project, such as a business or real estate acquisition, expansion, remodeling, or large equipment purchase should utilize long-term financing or a term loan. Financing a project over the proper term is important. A project should be accretive, or create additional value to the business, while providing sufficient cash flow to service the debt incurred and an additional return to the owner.

Short-term financing, such as lines of credit, should be reserved to shore up working capital and pay expenses during irregular cash flow cycles.

Seek loans with longer loan terms and no balloons. Balloon is a term used to describe when a loan does not fully amortize over its term. This means […]

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