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So far Live Oak Bank has created 193 blog entries.

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 […]

Dental Customer Spotlight: Sultan & Dr. Mehjabeen

By |March 25th, 2014|

Dental Customer Spotlight

Sultan and Dr. Mehjabeen share their experience about working with Live Oak Bank.

Dental Customer Spotlight: Dr. Shawn – California

By |March 21st, 2014|

Dental Customer Spotlight

Dr. Shawn shares his experience about working with Live Oak Bank.

Abundant Opportunities To Own Business Property

By |March 18th, 2014|

Should You Jump In?

If you’ve ever thought of owning the property underlying your dental practice, now is the time.  The commercial real estate market has stabilized over the past few years and there is an abundance of exceptional properties available for purchase.  With relatively stagnant sales during the Great Recession, it is now truly a buyer’s market with commercial real estate prices lower than they have been in decades – down 30% from the national peak* before the crash in 2008.  In addition, properties are available in prime locations.  Small business owners are starting to invest in premium retail properties for their private enterprises.

Many commercial real estate owners are also realizing a cost savings in building out their properties.  The competition among builders for CRE construction jobs has driven costs down, with some builders significantly cutting their margins in order to maintain payrolls.  Dental office designers and architects are also trimming costs as they compete for fewer projects. As a […]

A Primer on Pharmacy Financing: Intro

By |March 14th, 2014|

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

Independent community pharmacy is an evolving yet thriving industry, with many opportunities as well as some challenges. Among the challenges pharmacy owners often face is financing. As a pharmacist and former pharmacy owner, and a banker since 2009, I regularly hear pharmacy owners exclaim: “Banks don’t understand pharmacies, they just don’t get it!” Many times during my 20 years as a pharmacy owner, I felt the same frustration.

Independent pharmacies are often an enigma to bankers. Bankers are generally younger, healthier, and wealthier than the service-seeking demographic frequenting most independent pharmacies. There is often a fundamental disconnect with the industry. Those bankers don’t understand why patients would seek out an independent pharmacy instead of a local chain, grocery store pharmacy or even mail order. These bankers consider an independent pharmacy as a quaint anachronism rather than the $4 million local health care provider. It is often frustrating, but pharmacy owners need to do a better job explaining their businesses, their opportunities, and their prospective financing projects to bankers. Bankers want to […]

Maintaining Practice Value Series IV

By |March 10th, 2014|

Finally, and perhaps most importantly, the last step to building and maintaining practice value is maintaining positive cash flow. Nothing will sink your practice value faster than poor cash flow. Cash flow can be defined as total monthly income minus the total cost of operating expenses. A practice with cash flow equaling 40% or more of total income has flexibility to hire new associates, purchase new equipment, and ride out market fluctuations. But practices with cash flow of about 25% of total income may be struggling to meet monthly payments and lack the flexibility to take advantage of new opportunities. Costly salaries, rent, and debt are the biggest contributors to poor cash flow. If your debt is over three years old, consider taking advantage of today’s lower interest rates and refinancing or consolidating debt to improve your cash flow.

Click to read  Maintaining Practice Value Series.

Winning Strategies for Effective Inventory Control

By |March 6th, 2014|

Winning Strategies for Effective Inventory Control

Presented by: Karen Osborne, CPA, MBA
Lacher McDonald & Co., CPA’s
Courtesy of: Live Oak Bank

Maintaining Practice Value Series III

By |March 3rd, 2014|

Step 3 to building and maintaining your dental practice value is creating a technology investment plan. Keeping your practice equipment and technology up-to-date is critical to the future value of your business – but more importantly, it’s imperative to the comfort and well-being of your patients. Advanced technology usually means more and better options for patients. When you can deliver better options, your patients have a strong incentive to keep coming back.

Consumers today are savvy shoppers and understand what current “best practices” are. With social websites that encourage the sharing of personal ratings of business services, they may have instant input on what’s available from your competition. If you are not staying current with the latest offerings such as laser injections and teeth alignment services, your practice may lose not only some of its equity value, but its stable patient base as well.

Regularly investing in new advancements in dental equipment is an important means of remaining competitive while meeting your patients’ needs for […]

Maintaining Practice Value Series II

By |February 24th, 2014|

Step 2 to building and maintaining your dental practice value is designing your practice with longevity in mind. If you are building or remodeling your practice, create a floor plan and office design with intrinsic longevity so they will still be appropriate years from now when it’s time to sell. Use an open floor plan that ensures ease of traffic flow. Build in the capacity to expand services as needed with extra operatory, laboratory, equipment or storage space. Use furnishings that are classic in design and colors that are timeless. Consider incorporating environmentally friendly materials and systems that save energy and improve air quality, as these will positively impact the value of the practice. While poor practice design may not be a deal-breaker at the time of sale, a carefully thought-out floor plan and interior structure can add perceived value to the practice for the right buyer.

Click to read  Maintaining Practice Value Series.

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