If you are looking for ZERO DOWN chiropractic practices for sale, the new SBA rules can go in your favor and help you find one!
Yes, you read that correctly – it is now possible to buy a chiropractic practice with a downpayment as low as zero.
Read the post here to find out (or if you prefer, click here to watch a short video explaining How to Buy a Chiropractic Practice for Zero Down)
SBA RULE CHANGES FAVOR CHIROPRACTORS
In May 2023, the Small Business Administration (SBA) released a series of substantial changes in its lending criteria.
Amidst pages of explanations, a few important details emerge for those looking to buy a chiropractic practice.
- With Seller Financing help, it is possible to now purchase a practice with as little as $0 Downpayment. Formerly, the SBA required Buyers to contribute 10% equity or a Buyer “cash injection” to secure the loan. We use the term “downpayment” because it is a more familiar concept to most. Essentially, what that means is that if you are purchasing a practice that is $300,000 – you would need at least 10% of that price available to contribute as your Buyer Equity-Cash Injection-Downpayment and then the bank would loan the other 90%. With the new SBA rules in place, if the Seller is willing to Owner Finance the 10%, your downpayment requirement can be waived by the SBA.
- With Seller Financing help, it is also possible to now purchase a practice with as little as 2.5% Downpayment. This structure would be almost the same as the above, except the Seller would only have to Owner Finance 7.5% of the Purchase Price, instead of 10%.
- In BOTH of the above scenarios, the Buyer is still responsible for other associated loan fees. Neither of the above options is a “no out of pocket expenses” situation. The downpayment can either be waived or significantly reduced, but the Buyer still has the typical bank fees for loan administrative costs, bank appraisal, closing, etc. These can run from 1-4% of the total purchase price, so if you have absolutely no money to invest, you would not likely be approved for the loan because you still have some anticipated costs. But the total amount of your investment is significantly less by the amount of the downpayment waiver or reduction.
Examples:
Here’s a practical example with some figures to estimate on possible ZERO DOWN Chiropractic Practices for Sale. Let’s say you want to buy a practice that is priced at $300,000 and the Seller is willing to Owner Finance the 10% per the new SBA lending criteria. Formerly, you would have needed $30,000 (10%) + $6000 loan costs (we’ll estimate an average of 2%) = $36,000. Under these new financing opportunity, if you have approximately $6000, to cover the anticipated loan costs, you can now purchase the practice whereas in the “old financing system” you would have only been able to purchase a practice that was less than $60,000 (because of the required 10% downpayment + loan fees).
If you want to estimate on the higher side of your loan costs, in the same scenario of purchasing a $300,000 practice with a Seller that’s only willing to finance 2.5% and loan fees at 4% – here’s what it looks like: $300,000 price x 2.5% downpayment ($7500) + 4% loan fees ($12,000) = $19,500 — still saving you a ton of cash from the former financing methods!
A FEW CHALLENGES
While this new SBA ruling has potential to bring many ZERO DOWN Chiropractic Practices for Sale to the market and really be a game-changer for both Buyers and Sellers, not every chiropractic business will have this financing available for a few basic reasons:
- Some Sellers need 100% of their sale proceeds to head off into retirement, pay off debts or for funds that they are seeking to launch them into their next season or phase of life and business. So they will not want to offer Owner Financing.
- Some Sellers will feel that you (as Buyer) may not be an “acceptable risk” for this type of Owner Financing, particularly if you have some serious student loan debt levels and/or no collateral or co-signer to secure the debt.
- Some Buyers do not want to feel indebted or tied down to the former Owner (Seller) and would not be interested in this financing arrangement.
LIMITED TIME OFFER or LIMITED SUPPLIES AVAILABLE?
At the risk of sounding like an infomercial, the reality of these new lending criteria is that even though it is made available by the SBA, all banks are not yet participating in these programs. In fact, we’ve been shocked at how many banks are adopting a “wait and see” approach.
So the “bad news” is that, at this time, you can’t just walk into any local bank and ask for these types of lending terms. If you do, prepare to be met with blank stares or very different loan requirements than you’ve read about above.
The other detail is that this new incentive from the SBA is temporary and is currently set to be valid only on loans processed prior to May 2024. Accordingly, you may want to take a “while supplies last” outlook on these incentives and pursue any ZERO DOWN Chiropractic Practices for Sale that you can find – while they are still available. Because if the SBA shuts down this program next year (or early) then you lose out on these opportunities to lower your investment required.
NEXT STEPS
I hope that this news is helpful to your search for a chiropractic business and that the possibility of ZERO DOWN Chiropractic Practices for Sale can positively impact your desire to be in the owner’s seat!
–> For a deeper dive on the topic, click here to watch a video explaining How to Buy a Chiropractic Practice for Zero Down.
–> Or if you want to find a practice for sale, Click here see our current listings of ZERO DOWN Chiropractic Practices for Sale
