How We are Different from Traditional Lenders

With over 60 years of experience in poultry financing, it’s clear that we are devoted to both the industry and the loan process. Industry knowledge and lending expertise are just two of the benefits of working with Live Oak Bank.

So how are we different?

1. Our loan terms set us apart from any other lender. We can lend up to 5MM over a 25-year period, which allows our borrowers greater cash flow.

2. We know the industry. Our team has decades of industry expertise and can answer your questions thoroughly. Whether you are looking to build your first house or refinance your existing farm, we will assist you in every stage of the process.

3. Our in-house construction team is there from the first draft of paperwork to the first step you take into your new chicken house. Each member of our construction team is proactive and will help you throughout the entire building process.

4. We make sure to meet every customer and stick with him or her throughout the building and growth experience. Live Oak Bank also provides a dedicated person who tracks grower flock reports, revenues and expenses to provide better data to poultry growers.

5. Our technology platform, Portal, allows us to make communication and the loan process simple and transparent. With Portal, the application process is simplified, and there is minimal paperwork. Our loan officers, underwriters, and closers are available to assist you with any questions or concerns.


Veterinary Practice Financing: Real Estate

What You Need to Know About Veterinary Practice Financing

One opportunity for an owner to best position the business and increase future wealth is to own the building where the practice is located. In recent years, commercial real estate values have reset and many commercial properties have become available and more affordable. Consequently, a number of owners have taken advantage of the opportunity to become their own landlord.

Purchasing an existing building, building a facility or remodeling a practice are generally easily financeable, and banks often provide 100 percent financing for such a project. It may be helpful to include real estate in a business loan, whether it is an acquisition, expansion, refinance or startup. Including real estate in a loan will allow the bank to lengthen the term. Real estate loans are generally termed over 20 to 25 years, making payments very affordable.

North Bay Business Journal Features Roger Stockton

North Bay bank features Roger Stockton, Small Business Administration loan officer, including his favorite SBA lending stories, and recent bank news.

Significant news at your bank: Live Oak Bank announced a new lending division in January 2015 offering financing to the Wine and Craft Beverages industry. After extensive industry research, Live Oak Bank assembled a team of lenders and industry experts to address the need for financing to wineries, vineyards, breweries, distilleries and ancillary businesses in this space. Live Oak Bank can provide funding for acquisitions, successions, partner buy-ins/outs, expansions, operating capital, refinances, loan payoffs and real estate.

Learn more about Roger Stockton and his SBA lender profile.

What is Cash Flow? | Manage Business Expenses

Manage Business Expenses

The first step in improving your cash flow is to manage 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 create the necessary and realistic budget lines based on your revenue. By creating a budget and controlling your spending over time, you can prepare for slow months by saving in months that are more profitable. As you see these trends throughout the year, you can plan things like inventory purchases according to your budget. Part of an effective budget is examining it month to month with the appropriate team members to identify changes that need to be made. Sometimes these changes will be modifications to the budget, but some will be changes your staff can make to decrease expenses. For example, are there discounts or reward programs for office supplies? Do you need to restructure your staffing plan? Your budget will be able to provide insights to your business.


Practice Expansion Financing

What You Need to Know About Practice Expansion 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

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 coming in and out of the cemetery, that is where I was exposed to the funeral side of the profession. There was an aura around the funeral directors and my introduction to funeral service was born.” When I was 18, my mom had the opportunity to move to NJ and work at a cemetery there. So we moved and I was able to get an internship at the Waitt Funeral Home and I have been in the business ever since,” David related. With his work ethic and commitment to service, David acquired his first funeral home at age 27 and now owns 5 funeral homes.

David’s successful business is built on passion for service and he incorporates this passion to meet challenges that being a new firm faces today. “The perspective of a funeral home has to be similar to a ministry. We have to meet the people where they are at and by doing that, even if that means taking funeral service out of your location, you are letting people know that you are a beacon of hope in their community. We are here to help. We are here to honor their loved one. We are here to earn their trust and help them in a difficult time. And that is what we are going to do. So rather than say, we have been here for 95 years, what I have found as a first generation funeral director is that I have had to prove myself to my community. I’m 33 and I have let people know that it is my heart’s desire to help and minister to them. I consider it a ministry. Not having a reputation of many years in business, I may be the second or third phone call from a family, but almost always they come back to me because they appreciated the time I spent with them, the questions I answered and the things I said to them,” David said humbly.

David and his staff are meeting the challenges of today by changing the vocabulary of funeral service and how to work with families. “We focus on the families that appreciate funeral service, the family circle, and creating legacies,” David stated. They achieve this philosophy by having a community relations program where they work with the needs of a particular parish, the parish’s pastor and congregation. “We can honor their lives as their faith dictates and not the way we have done it for the past 40 or 50 years. More and more, as we all know, many people are not practicing a religious faith in the traditional sense, so we have had to find ways to meet their needs as well, whether it be through community organizers, hospice or even through advertising. The message we convey in our advertising isn’t about our funeral home, but instead speaks of honoring a life – that it is okay to live, laugh and love. We also use social media and send out daily email blasts with words of encouragement to keep our name in front of families,” said David.

The challenge of cremation isn’t difficult for David’s business. David relates, “For my entire career the cremation rate has been around 35% and now it is rising to 50%. I can see where it has been hard for older, generational funeral homes that have seen cremation rise and hurt their business. But for us, my generation, we see it as an opportunity in service. For us, it has always been talking to the families and seeing what they want and then creating the service. We have always taken the position that your choice of disposition is your choice. We just want to figure out how to tell the story. Ultimately, funeral directors are story tellers. We need to be co-creators in that story. The family gives us the information and we have to figure out how to get it to the public. One thing that I tell families is, as funeral directors, it is our responsibility to make sure that their guests know more about their loved when they leave, then when they entered. Funeral directing is not simply a set-design, setting up the casket and flowers, make the body look good and cross your hands and stand at the door and welcome people – but instead it is creating an experience where you are story telling. It is revolutionary.”

“An approach we have been taking, especially with direct cremation is – ‘listen, we understand that you don’t want any service or anything of that nature, but our staff will take a moment to honor your loved one before we go to the crematory. A moment of silence, quickly before we head out in honor of your loved one. I can’t tell you how many people say to me – ‘really?’ And we say, yes, a moment of silence. Looking back at this, it cost nothing to be human. This is what we are called to do. I firmly believe that funeral service is a calling. Yes, you have to run it like a business, but to take a moment of silence before you go to the crematory (where no one else is going to go) that’s where trust and integrity happens behind the closed doors of our profession,” he stated with conviction.

It is important to David to serve as many people in his community as possible and because of that he owns five funeral homes. He had built and grew his first three funeral homes with local bank financing, but when he wanted to expand to meet the needs of his community to a fourth funeral home he came up against some obstacles. With a closing deadline fast approaching and local financing options not working out, he contacted Live Oak Bank. They were able to make the deal in time for him. “Live Oak Bank has been an incredible resource for my business and a wonderful partner as well. They understand the financials of the funeral industry and they can help you obtain the financing you need because they understand what it takes for a funeral home to grow,” he explains.

David runs his business in a pro- active manner and sees this as a future trend. They handle all the arrangements and employ a fully licensed pre-arrangement director. They have a graphic artist on staff that creates portraits, brochures, slide shows, and prayer cards. He states, “Everything you can do with computer graphics today is amazing. That’s where it is going to be night and day where other funeral homes would have had to pay for that, but if you can bring it in-house – it is tremendous. Ultimately, our profession has to get back to service from an employment stand point, meaning Funeral Directors coming out of school with minors in English and History who are able to speak with families and extract their stories and be able to create poetic obituaries or be the celebrant or be the editor at the service is huge.”

David’s future goals are certainly to grow his firm. “I’ve got a long road ahead, only the Lord knows. The concept is I don’t ever want to grow faster than the good people I have. So if an opportunity comes up and I don’t have the right person to put there that shares our mission, our culture, I wouldn’t be able to take advantage of the opportunity at that time. We are constantly working on our great talent pool to help us grow for future opportunities. Providing families with legacies is what we will and want to continue for the future,” David said.

“At the end of the day, when people walk in and are grieving, in a very short amount of time we have to let them know we care about them. We feel their grief, we cry, we sit across from them and we are there to earn their trust and honor their loved ones. Let’s try to do this together. Most families here this message and it resonates.” “I love this business. It is a noble field and profession. I enjoy every day because of what I do,” said David. David’s devotion and compassion for the families he serves, his profession as a whole, his community and family are a tribute to our industry and proves success comes from a sincere heart.


Reposted with permission from Funeral Business Advisor. Originally printed in the March | April 2015 issue.

Claim Your Business by Google

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. Claim your business today!

5 Questions for a Lender in the Entertainment Industry

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

  1. 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.

  1. 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.

  1. Should we be expanding now?

Now is a great time to expand! With interest rates still near all-time lows, access to capital is relatively inexpensive. Moving forward with an expansion or refinancing existing debt are both ideal in a market like this.

  1. How about valuation?

Borrowers often overlook the importance of valuation. Valuation goes beyond assessed value, appraised value or collateral and drives the type of financing available to a borrower. Taking a holistic view of valuation is key: revenues, cash flows, business plans and management are all components of value. These are things that a lender, like Live Oak Bank, look for first.

  1. Why would I utilize an SBA product?

In an SBA loan, the bank makes the loan, but the debt is partially guaranteed by the SBA. This allows the bank to provide credit to a borrower who may otherwise have difficulty obtaining a loan with favorable terms. SBA loans tend to be borrower friendly, flexible to equity and collateral requirements, have longer terms and no balloons or covenants. For example, a conventional loan may have a 10-year amortization with a balloon in 3-5 years, while an SBA loan will have an amortization and term of 10 years. The SBA acts like an insurance company, allowing the bank to extend its conventional credit reach, and this is a benefit to all SBA borrowers.

5 C’s of Credit Analysis

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.

• Collateral: A lender will consider the value of the business’ assets and the personal assets of the guarantors securing the loan as a secondary source of repayment if the loan cannot be repaid. Collateral is an important consideration for a conventional loan, but not as imperative with an SBA loan.

• Condition: The lender will need to understand the condition of the business, the industry, and the economy. Are current conditions likely to change, deteriorate, or improve?


The five components that make up a credit analysis help the lender understand the owner and the business and determine credit worthiness. By knowing each of the “5 Cs,” you will have a better understanding of what is needed and how to prepare for the loan application process.

Determining Your Debt Service Coverage Ratio

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 available to pay each $1.00 of debt.

Also, calculate a DSCR that includes your officer draw (EBIDA / Debt Service + Officer Draw) to ensure there are ample funds to pay yourself.

Once you know the strength of your cash flow, you can determine what steps you need to take to improve it.