How to Get a Loan for Your Pet Grooming or Boarding Business

Around 62% of Americans today own a pet, and about 9% of total pet owners’ spending in this country falls into the pet services category. While this may not sound like much, pet services is one the fastest-growing areas of pet spending, more than quadrupling between 2004 and 2021. In 2021, pet services spending reached more than $10.7 billion, and demand is projected to grow exponentially through 2030.

The pet care and pet services industry include things like vet care, grooming, boarding, training, dog walking, and even pet food and supplies. If you’re thinking about starting a business in the pet care industry or growing a business, you already own,here’s a look at your options for financing a pet care business and the payment options available to you.

Why Financing for Pet Care Businesses Is Important

Getting financing is an important step when starting any new business, and pet care businesses are no different. Financing a pet care business can help fund upfront costs, such as the expense of leasing or buying a storefront or warehouse, purchasing equipment, obtaining licenses, buying insurance, and even designing your brand and marketing efforts.

Setting Up

The equipment necessary depends on what kind of pet care business you’re opening. If you are opening a pet grooming business, for example, you might need everything from bathing and drying stations to grooming tables, kennels, an enclosed run, and a retail storefront. If you’re opening a pet boarding business, you might need a front desk space as well as multiple pet play areas both indoors and outdoors, kennels, camera systems, and more.

For veterinary care clinics, your needs will be even more involved. Your building needs to include waiting areas, exam rooms, kennels, grooming areas, indoor and outdoor pet spaces, and treatment rooms for vaccinations, scans, and more. If you plan to offer more involved medical procedures in your veterinary practice,ranging from basic pet health needs like spaying and neutering or ultrasound, to emergency services, cancer treatment, and even serious surgery,you’ll need surgical rooms and a facility that supports such.

You will also need to purchase medical gear and machinery for the pets in your vet clinic: everything from thermometers and scales to ultrasound machines, x-ray machines, tables, and even credit card machines so customers can pay their vet bills.

Hiring

Capital business financing for a pet care business can be used to cover the initial and ongoing cost of hiring providers. This can include sign-on bonuses, recruitment fees, paying for licensing requirements, and covering future cash flow needs like employee payroll.

Getting the Word Out

Whether you’re opening a pet sitting business or a veterinary clinic, marketing your new business is important for drumming up customers. Financing for pet care businesses can cover things like:

• Building a website
• Purchasing signage
• Advertising (billboards, local newspapers and magazines, online ads, physical mailers, etc.)
• Social media campaigns
• SEO marketing

Making an Existing Business Your Own

In some cases, you might decide that it makes more sense to purchase an existing pet care business rather than start your own from scratch. Depending on the type of pet business financing you get (and the loan amounts available to you), your funding can cover this, too.

Financing for pet care businesses can be used to buy out existing owners, purchase an established building and existing equipment, renovate or remodel to suit your unique business, and market your rebranded company to pet parents once you’re ready to reopen the doors.

What’s Needed When Getting Financing for a Pet Care Business

Whether you’re wondering how to get a loan to buy a pet grooming business, curious what the monthly payments would be on a pet business loan, or are wondering how to prequalify for the best interest rates, here’s how to best prepare to get financing for a pet care business.

The Credit History Lenders Want

Before you’re ready to apply for a business or personal loan for your pet business, spend some time getting familiar with lender requirements and conducting your own financial check-up, so you can be the best possible applicant.

This means:

• Making all monthly payments on time and in full
• Running a personal credit check to look for any errors or red flags
• Paying down existing debt, if possible, to improve your credit utilization and debt-to-income (DTI) ratio (plus you’ll save on added interest charges!)
• Not taking out unnecessary debt right before you apply for a business loan

Whatever a lender chooses to look at when considering your application for pet care or veterinary financing, no credit check should come as a complete surprise if you’ve done your homework ahead of time.

Additional Documentation

You may also be asked to provide bank statements, profit and loss (P&L) statements, tax returns, and other financial documentation as part of the application process for financing a pet care business. Some lenders will only want the last few months while others could request these from the past few years. It depends on the lender, your own business history, and how much you’re asking to borrow.

Your Experience

In addition to your credit score and business financial history, lenders will also be looking for borrowers with industry experience. Even if you haven’t owned a pet business in the past, having pet healthcare, wellness, grooming, or caretaking experience can show that you understand pet needs and how to provide for them.

Your Plan

Lastly, most lenders will ask for a formal business plan before they’ll approve your request for financing for a pet care business. This plan may include financial projects, market research, industry trends, and more to give the lender and you peace of mind that the company is well-prepared to succeed.

Common Options for Financing a Pet Care Businesses

There are many different types of pet financing available, depending on the type of business you want to open, what you qualify for, and how much you plan to borrow.

SBA Loans

Loans backed by the Small Business Administration (BSA) can provide owners with the funding they need to start, grow, or acquire a pet care business. The application process can be lengthier and more involved than some other loan types, but funding is available for up to $5 million.

Eligibility criteria include operating in the U.S., being a for-profit business, and meeting certain business credit history requirements. Even newer startup businesses and those with limited or bad credit can sometimes qualify, though, so it may be worth a look.

Traditional Loans

Traditional business loans include those available through banks, credit unions, and specialized business lenders. These loans offer lump sum financing for pet care businesses that can be used for startup expenses, as working capital, or to purchase certain fixed assets. After you apply for a pet loan and get approved for funding, you’ll repay that business loan debt according to a set payment plan, often with a fixed interest rate.

Microloans

Microloans are small loans that are available through select business lenders, nonprofit lenders, and community development institutions. Since they are lower value loans, they can be the ideal solution as financing for pet care startups and smaller sole proprietors. Once you repay your microloan according to the repayment terms, you’ll establish a positive repayment history. After that, many lenders and lending platforms will allow you to return and borrow more next time.

Business Lines of Credit

A business line of credit works similar to a revolving credit card, giving you an open credit limit that you can use as needed, when needed. Once approved, your line of credit will remain open for a set number of years and gives you quick access to funds without needing a lengthy application and approval process.

If you don’t spend anything, you don’t have any monthly payment to worry about and you won’t incur direct or deferred interest charges. Like a credit card, you can also pay off your balance to free up your credit line, which can be used for future purchases and cash advances.

Equipment Loans

If your pet care company purchases include fixed assets like machinery, vehicles, high-value tools, or medical equipment, a secured equipment loan might be the best bet. This option for financing a pet care business holds the equipment asset as collateral to secure funds, so they can be easier to get approved for than unsecured loans and lines of credit. This is especially helpful if you have limited credit or want to lock in at the lowest possible interest rate.

Seller Financing

Seller financing is a good option if you are purchasing an existing business or used equipment from someone else, as it helps bypass the business lender process altogether. You and the seller can work directly to negotiate a price as well as repayment terms, and you’ll make payments to the seller each month until the business, machinery, or other assets are repaid.

Funding Alternatives for Pet Entrepreneurs

Not sure if any of these loans and other options for financing pet care businesses are right for you? Here are some alternatives you might consider.

• Grants: Available to many nonprofits and animal welfare businesses, grants are essentially free money gifted to businesses that qualify. You will need to meet certain criteria regarding your business, how you operate, and even how you’ll use the funds. However, you won’t have to pay this form of financing back, and there typically isn’t a credit history component.
• Crowdfunding: Platforms like Kickstarter, GoFundMe, Fundly, and more allow you to accept funds from others in your friend circle, community, or around the world. You may opt to request donations or can offer goods or services in exchange for donors’ support, but the funds generally don’t need to be “repaid” directly.
• Angel investors or strategic partnerships: If you have a great idea, niche market, or exceptional business plan, you may be able to get angel investors or strategic partnerships that will help finance your pet care business. In exchange for these startup funds, you’ll usually need to offer investors a share of your company and/or its future profits.
• Franchise options: Rather than start from scratch, you might consider buying a franchise from an existing pet grooming or boarding company. Brands like Dogtopia have locations all around the country, so you’ll benefit from the business’ existing network, marketing, and business structure. You will usually need to pay a franchise fee and have to follow set rules when managing the business, but options for financing pet care businesses are usually available and the parent brand will often help you get up and running and set you up for success.

Final Thoughts

Funding is an essential step when starting a new pet-related business. Getting financing for pet care businesses can be tricky, though, especially if you don’t have an existing business history or limited funds of your own. Whether you need cash to cover startup veterinary expenses, plan to found your own pet health insurance brand, are looking to offer mobile pet grooming in your community, or want to buy an existing business from someone else, there are many funding paths available to help you reach your passionate pet care dreams.

FAQs on Financing for Pet Care

Are pet care businesses profitable?

Pet care businesses focused on grooming, pet sitting, medical services, and pet food or supplies can be profitable. Whether or not a specific business is profitable depends on its individual market and business model, but with this wild growth in the pet care space, it’s easier than ever to have a profitable business.

Can I use a credit card for financing a pet care business?

Business credit cards can be used to cover many expenses involved in starting, growing, expanding, or acquiring a pet care business. While you probably can’t use a credit card to pay for retail space, hire employees, or buy heavy machinery, business credit cards can be used to purchase supplies, pay for marketing efforts, furnish your office, and much more. With the right rewards business credit card, you can even earn points, miles, or cash back on the things you’re buying anyway.

What do you need to start a pet care business?

The requirements and needs of each pet care business will vary: A veterinary clinic has many expenses and medical care-related purchases that a doggie daycare or in-home pet grooming business does not. It’s important to do your research to understand what’s required of your specific business, including licensing, insurance, staff wages, supplies, and more.

Do I need insurance to start a pet sitting business?

While insurance isn’t required in many cases, it’s often a very good idea whenever you’re working with other people animals, transporting pets, or will be in someone else’s home. By being insured and bonded through a reputable insurance company, you can give your customers peace of mind while also protecting yourself from potential liability if something were to happen.

Can I start a pet insurance company?

You can start a pet insurance company of your own, though this is one of the more complex pet care businesses you could start. It’s very important to research and conduct a thorough analysis of your market, create a solid business plan and structure, and acquire any necessary licenses to provide and sell insurance products to others.

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