Understanding What Happens in Loan Closing

Loan Closing

Once a commitment is made by the institution providing financing, the loan closing specialist, or closer, will prepare a closing checklist of all required documentation needed on your loan prior to closing. He or she will contact you to schedule a kick-off call to explain the checklist in detail. All parties involved in the loan, including the borrower, the borrower’s legal consultants and the lender, will be included on the call. Your closer will then review and approve all documents received off the checklist and move the loan into the last phase of closing. At this point, final loan documentation, including the Note, Deed of Trust, Security Agreement, is prepared and reviewed by your closing team prior to you signing to ensure all necessary information is included.


Throughout the financing process for your funeral home, you will work with a group of specialists who bring your loan to fruition. Understanding the phases of the loan and the roles of the lending team members will help you gather the appropriate information and navigate more easily through the loan process.


Questions about financing? Read more or contact our team here.

Five Advantages of Owning Rather Than Leasing

5 Advantages of Owning Rather Than Leasing

Have you thought about owning space for your practice? Many veterinary practice owners confront this question at one point or another. Should you purchase commercial property or continue to lease? The answer varies.

New vets or start-up practices may benefit from leasing, providing the flexibility to move and grow. In general, it cost far less up front to lease commercial space compared to a real estate investment. For new practice owners, lease agreements free you up from the responsibility of property ownership, such as onsite maintenance. However, with lease agreements, you are not investing in your own future. Veterinarians with a strong client base and clear picture for the future should consider the benefits of owning.

  1. Long Term Investment

When you combine practice ownership with property ownership, you are investing in your long-term wealth. While property values are not as low as they were a few years ago, it is safe to assume they will continue to rise. As you pay down the note, you are building equity and net worth. By diligently growing your practice, you will be able to sell both the business and real estate when it is time to retire. Alternatively, you could sell just the practice and lease the property, allowing for a source of income during retirement. Building equity now will have long-term benefits.

  1. Tax Benefits

Real estate property owners enjoy tax advantages unique to ownership, including depreciation allowances and mortgage interest deductions. This deduction reduces overall taxable income, improving cash flow that you can reinvest in the business. Consult with a CPA or financial advisor to fully understand how a purchase would affect your particular circumstances.

  1. Stability

When you own the property, you can more easily plan for long-term costs associated with the property. Without the variables associated with lease agreement renewals, it is easier to project the annual costs for the practice according to your mortgage contract, insurance and estimated property tax. You can plan for the long-term without having to worry about increased lease payments or a cancelled lease.

  1. Control

When you own the business property as well as the practice, you have the control to develop, operate and modify the building to your needs as the practice grows. You aren’t at the mercy of the landlord’s guidelines for space modifications and can adapt your building infrastructure to accommodate future developments in veterinary medicine and growth of your practice.

  1. Commitment to the Community

By owning your building space or building a new practice, you show your community you are here to stay. Involvement and trust in the community will go a long way with customers and future customers. Consider refreshing the space if it is an older building. If you are planning a ground-up construction project, consider the aesthetics and practical needs of a vet practice. An architect and builder experienced in the vet space can help ensure success.

If the advantages of owning rather than leasing seem to be a good fit for you practice, you will need to decide on a ground-up construction project or purchasing and renovating a space.

There are several factors to keep in mind when looking to purchase commercial real estate for your practice. When looking for a location be sure it is close to your client base. Staying within 5 miles of you current location is a good rule of thumb; however, that can vary depending on your location. Once you’ve selected a location, make sure it is zoned for a veterinary practice, including overnight boarding.

Purchasing commercial estate has its advantages, and you will want to know how much you can afford before getting too far into the process. Based on the practice’s historical financials and the business’s cash flow, the lender will determine what the practice can support. Working with a lender experienced in veterinary financing will help the lending process run smoothly.

If you are looking to finance a ground-up construction project, the loan amount will include the cost of the real estate, design, and build. In addition, soft costs such as appraisal reports, surveys, permits, fees, title, EPA reports, supervision frees, construction interest carry allocation, and working capital will be included in the loan proceeds. Also, consider funds for new equipment and unexpected Change Orders. Knowing the maximum about you qualify for will allow you to plan your project accordingly.

Some lenders today – particularly those with experience in the veterinary industry – offer flexible loan packages that may include up minimal equity requirements and loan terms extending up to 25 years. These loan terms allow you to avoid a large down payment as well as benefit from lower monthly payments.

Purchasing the real estate where your practice will reside is an expensive investment. However if the property is suitable for your practice and is capable of supporting long-term growth without overtaxing your current cash flow, it can provide a solid foundation on which to build your business and future.

What You Need to Know About the Underwriting Process

Underwriting Process

In the underwriting phase, you will work directly with the underwriter assigned to your loan. The underwriter verifies and analyzes documents submitted during the application phase to determine accuracy and creditworthiness. The underwriter will complete a cash flow analysis and full review and analysis of other pertinent financial information related to both the business and the individual(s) seeking the loan. Additional financial details may need to be submitted to the underwriter analyzing the business. This information will be part of the credit memo, which is presented to the credit officer who ultimately approves or rejects the loan request. Specific questions regarding paperwork can be addressed directly to your underwriter.


By understanding your story, how you got where you are today and your plans for the future, your underwriter will be your advocate and assist you throughout the review process. When your loan is approved, you will receive a commitment letter with the terms and conditions of the loan. Once you provide your signature, you will move into the final stage of the loan process.

Live Oak Bank Announces New Division – Live Oak Trust

Live Oak Bank is excited to announce a new division of the bank, Live Oak Trust, offering Funeral and Cemetery Trust Services. Through this service, Live Oak Bank continues its dedication to the death care industry and expands its services to funeral home owners and cemeterians nationwide.

With a singular focus on funeral and cemetery clients, Live Oak Trust is committed to the administration of preneed funeral, cemetery merchandise and services, and perpetual care cemetery trust funds. Live Oak Trust is comprised of a team of professionals with over 200 years combined trust experience who understand the funeral and cemetery industry. Currently, Live Oak provides trust services in 18 states across the country.

“Expanding our death care services with the addition of Trust provides tremendous opportunity for Live Oak Bank as well as the funeral home owners and cemeterians who choose us as their fiduciary representative,” stated Chip Mahan, CEO of Live Oak Bank.

“With a combination of over 50 years of industry experience, we are proud to lead this team of experts to provide superior trust solutions,” commented Steve Jackson, CEO, and Rich Fisher, President of Live Oak Trust. “We will be able to navigate clients through a highly complex and regulated environment.”

The Live Oak Trust team has extensive experience and industry knowledge, enabling them to streamline the administrative and operational process associated with these accounts. To maintain the highest level of proficiency, Live Oak Trust has an in-house legal team that continually monitors state statues and regulations to ensure trust accounts are in compliance with current laws. Having such a keen industry focus and specialists on board, enables Live Oak to offer an exceptional level of service to the client.


Steve Jackson, CEO Live Oak Trust

Rich Fish, President Live Oak Trust

SBA Loans Gaining Ground In Self-Storage Financing

Self-Storage Financing

After more than 20 years in self-storage manufacturing, Terry Campbell left to bring a different product to the industry — Small Business Administration (SBA) loans.

In March, Campbell joined Wilmington, NC-based Live Oak Bank, a preferred SBA lender for several niche industries. Campbell was tapped to lead the bank’s new self-storage division. Before his new role, Campbell directed sales and marketing at a self-storage building manufacturer.

SBA loans weren’t available to the self-storage industry until five years ago, and Campbell said they’ve been underused because many banks aren’t knowledgeable about self-storage. The SpareFoot Storage Beat spoke with Campbell to learn more about self-storage SBA loans.

Read Full Article here: http://news.sparefoot.com/1551-sba-loans-for-self-storage

What Happens During the Loan Application Process?

Funeral directors often ask us about the loan application process. What is required to apply for financing and successfully complete the process? How long will it take to receive funds? Whether you need financing today or are hoping to gain a better understanding of the loan process to plan for future needs, it is important to know what to expect from application to closing.

Depending on the financial institution you choose, the process and the time it takes to receive funding may vary. Generally, once the loan application and all related documents are submitted to the bank, the rest of the process can take anywhere from two weeks to six months. The timing may vary based on the bank’s experience with funeral home loans, the borrower’s responsiveness in submitting the necessary documents, and the accuracy and completeness of information collected. At Live Oak Bank, our funeral home lending team works solely on funeral home loans and understands the intricacies of the funeral business, which makes the process smoother.

During each phase of the loan process, a borrower will work with different members of the loan team. The three stages of every loan are application, underwriting and closing.


In the application phase, a loan officer will work with you directly to gather all information needed to prequalify your loan request. First, you will discuss your plan for the loan proceeds. Are you looking to refinance existing debt? Are you looking to acquire a funeral home or expand your current operations? If you are buying or expanding, have the purchase price details available. The lender will need to understand your business and your plans for the future to submit a complete loan application. During the application phase, be prepared to present the following information to your lender:

-Describe your new and/or existing business and the local market. It will be important to understand the competition in the area, as well as the local demographics. The lender will also need to know about your experience in the subject business and the funeral industry.

-Discuss present revenue breakdown and anticipate future revenue and trends. What percentage of the revenue comes from traditional services, cremations, merchandise sales, etc. This information will help the lender better understand your business.

The application includes items such as corporate tax returns, current financial statements and annual call volume as well as your contact information, resume and personal tax returns.

Once all the necessary documentation is submitted, Live Oak Bank is often able to send you a loan proposal in 24 hours. After the proposal is accepted, you will move into the underwriting stage.

What is Cash Flow? | Managing Existing Debt

What is Cash Flow? Pt. 5
Managing Existing Debt

Another way to improve cash flow is to look at the current business debt because the terms of a loan can greatly affect cash flow. A balloon payment (a large single payment required at the end of the term to repay the remaining principle balance of the loan) has a dramatic impact on your cash flow when it is due. For example, a loan with a ten year amortization and a five year term will balloon in five years, requiring a) the remaining five years of principle to be repaid at the end of the term or b) the loan to be refinanced. A loan with a balloon can leave the borrower at risk for higher interest rates when the term ends.

What is the loan term or the period of time over which your loan is to be repaid? Shorter loan terms naturally have higher monthly payments. What is the interest rate on the loan? A higher interest will also increase the amount of cash leaving the business each month.

Refinancing current debt on your loan may be one way to improve your cash flow. Seek a loan with a 20-25 year term, no balloon payments and competitive interest rates. By comparing your current monthly payment to what your new monthly payment could be, you can see if refinancing will free up cash for your business. These monthly savings provide an opportunity to make improvements to your funeral home, to increase marketing efforts or expand your business.

For example, by taking advantage of Live Oak Bank’s competitive rates and 25 year amortization, one of our borrowers was able to save $9,850 per month on a $1,300,000 loan. With savings of $118,200 per year, our borrower was able to increase advertising efforts as well as make much-needed improvements to his facilities. While your situation might be different, you may still be able to capitalize on superior loan terms.

Understanding your business’s cash flow will help you determine the degree to which it needs to be improved. By taking the necessary steps to find savings and create guidelines for your business, you can increase the financial strength of your funeral home.

Build Your Dream Veterinary Practice

Build Your Dream Veterinary Practice: How Proper Planning Can Make It Happen

Presented by: Brian Faulk, Live Oak Bank, and Kelly TerWisscha, TWC

The experts from Live Oak Bank’s veterinary lending team and TWC combine their experience to walk you through what to expect and prepare for your veterinary practice construction project. This comprehensive approach connects the design, build, and financing. Whether you are in the planning stage or the middle of the process, this talk will provide you with the steps to take to ensure a successful build.

Download a copy of webinar presentation: Build Your Dream Veterinary Practice



What is Cash Flow? | Managing Receivables

What is Cash Flow? Part 4
Managing Receivables

Once you’ve created a budget, it’s time to look for ways to bring and/or keep money in the business. One very important aspect of cash flow is collecting receivables in a timely manner. Take a look at how long you have waited for payments historically. What is your approach to collecting payments?

Given the nature of the business, you will encounter families in various financial situations. The service and care you provide is of utmost importance not only for the families but also your business’s reputation. With that understanding, it is equally as important to the health of your business to have an approach or policy in place to collect payments. Understand how long can you wait for payments until it affects your cash flow. It is important to give this policy careful thought and drive consistency the best you and your staff can.

Along these same lines, you will want to understand the impact of trust and preneed accounts. In these contracts, the earnings are accumulated until the contract holder dies. Therefore, the earnings are not an immediate effect on cash flow until the services are rendered. That is to say, the trust and preneed insurance policies play a very important role in the future revenue stream of the funeral home. While important to future, the impact on today’s cash flow is dependent on your state’s statutes.