Live Oak Bank

About Live Oak Bank

This author has not yet filled in any details.
So far Live Oak Bank has created 201 blog entries.

Why Now is the Right Time to Buy

By |April 29th, 2014|

There are several key reasons why now is an excellent time to invest in commercial real estate.

Property prices have bottomed.  As with the residential market, commercial property values seem to have bottomed out.  In most markets today, a typical mortgage payment is equal to or less than a rent or lease payment.  At today’s CRE prices, you can retain more of your cash flow or acquire much more real estate for your investment than you might have just five years ago – all while investing in your future growth.

Abundant inventory.  In addition, commercial properties are currently available in abundance in most markets, providing an excellent opportunity to secure a prime location at a very reasonable price.

Rates at historic lows.  While business property rates will never be quite as low as those for residential properties, they are nevertheless mimicking the housing market with rates that are now at historic lows for commercial real estate. Your CRE loan today will cost you […]

Building a Foundation for Growth

By |April 23rd, 2014|

Owning your dental business property, along with your practice, has the unique advantage of laying a broader foundation for future growth. The three most significant advantages to owning your business real estate are:

Control.  When you own the business property as well as the practice, you have complete control to develop, operate and modify the building to your needs as the practice evolves, and as zoning regulations allow.  You are no longer at the mercy of your landlord’s guidelines for space modifications, and can adapt your building infrastructure to accommodate future developments in dental technology.  This gives you maximum flexibility to build the practice you want with the building and equipment enhancements you need.

Stability.  When you own your own property, whether a home or a business, you enjoy greater long-term stability in the costs associated with the property. You can more easily project the annual costs for your practice investment according to your mortgage contract, insurance and estimated property tax, without […]

A Primer on Pharmacy Financing: Expansion Financing

By |April 19th, 2014|

Banks are actively seeking good projects to fund and that includes independent pharmacies.

Increasingly, entrepreneurial pharmacists are becoming multiple pharmacy owners. The 2013 NCPA Digest, sponsored by Cardinal Health, shows that 25 percent of community pharmacy owners have ownership in two or more pharmacies. The average number of pharmacies in which each owner has ownership is 1.79, and that number is rising. Financing a second pharmacy (or third, or fourth, etc.), whether it is an acquisition or a 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 of the owner’s businesses, or the global cash flow, when evaluating financing an additional pharmacy. Strong cash flows from the owner’s existing pharmacies can support the acquisition or startup. For owners with a fair amount of equity in their existing pharmacy, a bank can often offer 100 percent financing for the expansion.

Read the full article here: […]

Dental Customer Construction Spotlight: Dr. Allison

By |April 18th, 2014|

Dental Customer Spotlight

Dr. Allison shares her experience with Live Oak Bank and how she prepared for building and marketing her dream pediatric dental practice.

A Primer on Pharmacy Financing: Acquisition Loans

By |April 16th, 2014|

Banks are actively seeking good projects to fund and that includes independent pharmacies.

With more than 1,000 independent pharmacies trading annually, and many banks now recognizing the value of an independent pharmacy as a customer, pharmacy acquisition loans through banks have become more common. A typical pharmacy acquisition exceeds $1 million, but is within the reach of many pharmacists as long as they meet the criteria of the 5Cs. The first step when evaluating an acquisition project is to develop a loan budget with a banker.

It is important that the lender fully understand the project to ensure that the budget is sufficient to acquire the business, transition the business, and run the business. Underfunding an acquisition project is a major reason for failure in pharmacy acquisitions. After developing a sufficient budget, a lender will utilize the previous owner’s tax returns to determine if there is sufficient cash flow to provide the new owner with a salary, have monies left to service the debt as well as additional funds provide a return to the business. When reviewing a pharmacy’s tax returns […]

When To Choose a Lease

By |April 15th, 2014|

For new dental practitioners who are uncertain of future space needs and want to ensure maximum cash flow as they grow their business, leasing may be a wise option.  In general, it’s far less costly up front to lease commercial space compared to a real estate investment, making leasing a better choice for those who lack equity as only one to two months lease value is typically required as a security deposit on a leased space.   A lease arrangement can also free up cash that can help fund the growth of your practice through equipment purchases or marketing.  In addition, practitioners with lease arrangements will not be tied to the responsibilities of property ownership, such as onsite maintenance and tenant rentals, and can focus more fully on their practice and patients.

However, there are also significant disadvantages to leasing that need to be carefully considered. Most importantly, with a lease arrangement you are not investing in your own future.  You do […]

Commercial Real Estate: Overcoming Your Fear of Ownership

By |April 8th, 2014|

The severe drop in property values that accompanied the Great Recession has caused many small business owners to be skeptical of commercial real estate investment. They have lost faith in the adage that property values tend to increase over the long haul, shying away from real estate purchases in favor of lease arrangements that insulate them from the unpredictability of the market.  Yet there has never been a better time to purchase the business property on which your dental practice resides.  The significant opportunities available to small business owners through investment in commercial real estate warrants a second look at the pros and cons of leasing versus purchasing your office space.

Common Terms Used In Lending

By |April 8th, 2014|

A Primer on Pharmacy Financing: What Compromises A Credit Analysis?

By |April 4th, 2014|

Banks are actively seeking good projects to fund and that includes independent pharmacies.

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: […]

A Primer on Pharmacy Financing: SBA Versus Conventional Loans

By |March 31st, 2014|

Banks are actively seeking good projects to fund and that includes independent pharmacies.

Most pharmacy owners are eligible for SBA-guaranteed loans that may offer some advantages to a borrower. 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 for 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, and do not have loan covenants. SBA loans have longer terms with no balloons. 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.

Not surprisingly, SBA lending requires numerous documents and can be tedious for borrowers when the lender is not a specialist. When considering an SBA loan, it is helpful to seek out a lender who is part of SBA’s Preferred Lender Program. A […]

You are about to leave the Live Oak Bank website

Disclaimer: This link will take you to a website outside of the Live Oak Bank site. The new site may offer a different privacy policy and level of security. Live Oak Bank is not responsible for the products or services that are offered or expressed on other websites.

Yes, I understand, please continue.

×
You are about to leave the Live Oak Bank website

Disclaimer: This link will take you to a website outside of the Live Oak Bank site. The new site may offer a different privacy policy and level of security. Live Oak Bank is not responsible for the products or services that are offered or expressed on other websites.

Yes, I understand, please continue.

×