Why So Many Veterinary Practices Are Relocating — and How to Fund It

17 Oct Why So Many Veterinary Practices Are Relocating — and How to Fund It

Over the past year, we’ve noticed a clear trend: a growing number of veterinary practices are looking to relocate in order to expand. Practices are outgrowing their premises faster than ever, and with the right financial planning, relocation can be both achievable and strategically rewarding.

Understanding the Two Key Elements: Property and Fit-Out

When relocating, there are really two main financial elements to consider:

1. The property itself — whether you’re buying a freehold or leasing a larger space.
2. The fit-out and build-out costs — everything that goes into transforming the premises into a fully equipped, functioning practice.

Funding the Property Purchase

The Banks’ appetite is so positive that they currently offer up to 100% funding for commercial property purchases in the veterinary sector.

Many people don’t realise it — in effect, the bank is buying the asset for you. This makes it an excellent time for established practices to invest in their own premises rather than continuing to rent.

Property loans are typically offered over a 25-year term.

Funding the Fit-Out and Build-Out

If you’ve owned your practice for a while, you’ve likely built-up equity in your goodwill — the intangible value of your business reputation and client base. Banks will typically lend up to 80% of your goodwill value to help fund your build-out or refurbishment.

In many cases, that’s enough to cover 100% of the fit-out costs, with repayment terms usually over 15 years (compared to 25 years for a freehold loan).

Practical Considerations During Relocation

Relocating a live practice requires careful planning. One of the biggest challenges is keeping your business operational while transitioning to the new site.

Often, there’s a period where you need to run two properties simultaneously — maintaining your existing premises while completing and fitting out the new one. Those temporary costs need to be factored into your financial planning.

Other considerations include:

• Lease obligations: Can you exit your current lease, or will you need to carry it for a set period?
• Existing freehold: If you own your current property, what’s the plan for it after relocation?

These factors all feed into the financial structure of the move — and having the right funding partner can make all the difference.

Navigating Property Types and Change of Use

If you’re buying a commercial property, financing is typically straightforward.

However, some practices find their ideal building in a residential property that requires a change of use. In these cases, timing is everything:

• If you have enough time before completion, healthcare banks can lend subject to obtaining change of use, with that condition built into the loan.
• If timing is tight, a bridging loan can be used to purchase the property first, allowing time to secure change of use and obtain accurate build costs. You can then refinance onto a standard healthcare loan once everything is in place.

How Banks View Relocation Applications

• Credit policies vary widely between banks and understanding how to position your application is crucial.

Where possible, it’s best to avoid traditional property development loans, which can be restrictive. Instead, applications can often be structured through specialist healthcare funding, particularly when the practice has a strong goodwill value that can be used as security.

Every lender is different, which is why working with a broker who understands the veterinary sector — and the nuances of each bank’s approach — can make a significant difference to both the outcome and terms.

Thinking About Relocating Your Practice?

If your practice has outgrown its current home and you’re exploring relocation, the process doesn’t have to be daunting. With the right financial structure and a clear understanding of what lenders are looking for, expansion can be both seamless and sustainable.

Get in touch with our team to discuss your plans — we’ll be happy to chat through your options and help you find the best route forward.