SBA Waives loan fees

By Dr. Alissa Wald and Scott Daniels
If you are looking to buy a practice there is no better time than now. With interest rates at their lowest and the recent waiver of SBA loan fees it might be time to consider that practice you’ve always wanted. On February 17th, President Obama signed into law the American Recovery and Reinvestment Act of 2009 which reduces or eliminates certain fees on 7(a) and 504 loans. For a limited time you’ll save up to 2% of your loan amount in waived fees. While these fees are generally added to the loan amount you’ll still save a lot. On a $500,000 practice loan you’ll save up to $10,000 or more. There are two types of loans. 7(a) loans are the most common and generally are variable rates. Loans can be used for real estate purchases, construction, practice purchases, refinancing existing debt, working capital expansion or new equipment. The government has also increased their guaranty of these loans to from 75% to 90%. 504 Loans are generally used for real estate and construction loans and include a first and second mortgage. The first mortgage is 50% and the second provided by the government is 40%. Ten percent either comes from a seller note or buyer down payment.
504 loans are advantageous because they offer fixed rates terms of 25 years and 20 years on each mortgage when you buy real estate. With rates running around 6% it could be a great time to buy real estate. Only certain lenders handle 504 loans and they tend to be a little more complicated because you are dealing with two banks. (The primary lender and the CDC bank, which stands for Community development center which provide the government guaranteed loan for the 40% second mortgage.
7(a) loans are more common and typically are variable with terms of 10 years for practice purchases and 25 years for real estate purchases. Most lenders will require 10% down either in the form of a seller’s note or buyer’s down payment. Some lenders such as Vision One Credit Union offer special SBA blended programs that require no down payment.
Of course conventional loans are still readily available with terms from 10 to 15 years for the practice purchase and 25 years for real estate. Conventional real estate loans often require as much as 25% down from the buyer making them out of reach for many people. Whether you decide on an SBA or conventional loan you should plan ahead and leave plenty of time to complete the banks requirements list. Lists often include such things as term life insurance, current tax returns for yourself and the seller. Since these items (especially life insurance) take time to complete –It is imperative that you plan ahead. Many buyers get life insurance prior to finding an office. So in your quest to buy your dream office it’s nice to know that rates are low and lenders are still readily offering loans (at least to doctors).

Practice Concepts works with several lendrs to assist buyer in obtaining the the best financing possible. We offer both conventional and SBA typle loans. Contact us if yo uhave questions about getting a loan to buy your practice.

What We Want Most: Buyers, Employees and Owners

Our great grandparents worked 15 hour days often 6 days a week. They worked multiple jobs, night shifts – whatever was needed to care for their family. Many of the sellers we work with started their practice with nothing and built it from sweat and tears. One seller worked the third shift at the hospital in order to feed his family until the practice made enough money.

In today’s climate many are reminded of yesterday with long gas lines, double digit inflation and unemployment that was sky high. The current times echo the sentiments of what buyers, owners and employees want, but today there is a little twist. Today’s generation seems to desire a balance of play and work, whereas many of the older generation just worked. The key to balancing both sides is to ensure that we excel at work or at play.

Earning a top salary means the business must be profitable. As an owner if the expenses increase and profits decrease, then something must be cut. If an employee is not performing or contributing to the “profits” at some point they will be laid-off. Buyers, employees even owners want the same thing… They all desire the ability to earn a great wage without working 15 hours a day. In essence everyone is an entrepreneur and practice owner. Some just have more staff then others. Imagine working for yourself and leaving early or refusing to work Saturday. Imagine your rent or mortgage increasing and your salary decreasing.

Both employees and owners face the same feelings and have the same concerns during these times. Either way it is hard work. If an employee does poorly they get terminated. If an owner does poorly they terminate other people.

If you are looking for a job or are currently employed the best way to shine and stand out is to take a risk. Suggest to your employer a reduction in your salary in exchange for a share in the profit or the equity. Or suggest a new service and negotiate a production bonus on revenues from that service. Or ask for an extra week off if you hit a certain revenue goal. Regardless of your position as owner or employee there are steps we can all take to insure success through trying times and concerns of reduced profits.

Here’s a few helpful tips to stay proactive. (1) Turn off the news and stop reading newspapers. They lag about 6 months behind the “real” situation. (2) Think outside the box. Try new services, add medical procedures, learn more about billing codes, open later, try more marketing….send letters, but do something. (3) Cut expenses, but do not skimp on customer service or marketing. (4) Increase and improve customer service: offer bottled water, chocolate, mints or something to make people feel better. It does not have to cost a lot, but should have some meaning and come from the heart. (6) Find a way to stand out from the pack. As an employee discover what your employer wants most. For new grads seeking employment tell your employer you’ll work for free or at least a commission from your production. (7) Become an expert at billing and coding and learn how to maximize your services (8) Again, turn off the news and stop reading newspapers. Remember people are still buying things and the majority of the population is still employed.

While we recognize that many people have lost their jobs or their homes, it is important to realize that eventually the recession will be over. People will find jobs again, discover new services and come out stronger in the end.


Practice Concepts provides practice brokerage services and appraisals for sellers and buyers in the eyecare profession. Practice Concepts’ management team includes Dr. Alissa Wald and Mr. Scott Daniels. Dr. Wald is a graduate of the University of Houston. She has owned and operated a successful optometric practice for 18 years. Her practice includes three associate doctors and six staff personnel. Dr. Wald is also the President of Practice Concepts and provides nationwide practice sales and consulting services. Scott Daniel, her husband is a licensed broker with Practice Concepts and provides practice sales services for eye care professionals and other healthcare entrepreneurs. Mr. Daniels has over 20 years of experience in business management, financing, marketing, and negotiations. Contact them at (877) 778-2020 or www.PracticeConcepts.com. They can also be reached by email at scottd@PracticeConcepts.com.