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Dr Jade Hammer's goodwill practice purchase

Everyone accepts the wisdom of owning your own rooms as an investment, but what hurdles does that create for an associate who wants to buy your share of a practice?

  6 minutes


Veterinarian Dr Hammer had come to the Main Street Veterinary Clinic in Bairnsdale, in country Victoria, for three weeks as a student, and stayed forever. There were two partners in the clinic, and over the course of seven years Dr Hammer purchased a half-share in the business from one of the partners. But that share didn’t include the building they were in, which was jointly owned by the original partners through their self-managed super funds.

“I really wanted to buy the part of the property as a long-term investment,” he says. “It's always going to be a vet clinic, and it's something else I want to hold onto. And I did have to convince the partner to sell that off because he could have just as easily kept that property and continued taking rent from it. Luckily for me he was moving overseas, so he wanted to completely move on with his life and I convinced him to sell his half.”

That was the easy part.

“I was always with one of the ‘Big Four’ banks and my initial purchase of the clinic was through them,” Dr Hammer explains. “But when I wanted to purchase part of the property, they wouldn’t help. My other business partner had his half of the building in a super fund, which meant I couldn't borrow against the property itself. That meant it would be a goodwill loan and my bank wanted nothing to do with that.”

The struggle to find finance

The Gippsland region of Victoria has always been home for Dr Hammer. He grew up in the town of Briagolong, about 70 kms east of Bairnsdale. He had started his studies at Monash University, transferred to Queensland to finish them, then returned to Bairnsdale. “I actually came back because my mother was terminally ill, so I was just planning to be back for that period of time,” he admits. The Bairnsdale clinic offered him a spot for his final placement. And at the end of that placement, they offered him a full-time job. “Plus it’s a nice area,” he says, “so I decided to stay.” But it was frustrating that Dr Hammer couldn’t finance the purchase of half the clinic—especially after going to the effort of convincing the departing partner. He started looking around and comparing interest rate offers from other banks. “I knew from conferences and emails and other things that BOQ Specialist was a vet-supportive bank,” he says.

“Plus my business partner also had his credit card through BOQ Specialist. We use the credit cards to purchase all the drugs for the clinic to get the Qantas points. So I was already getting a credit card through them as they had the best deal in terms of Qantas frequent flyers.”

He got in touch with the bank, who passed him on to Luke James. Luke suggested a mix of securities to secure the loan. “So that saved the day there and then,” says Dr Hammer. “Since then, I've moved everything to them, including investment properties. In fact, I'm about to move another investment property to BOQ Specialist because of better rates plus their willingness and their understanding of vet clinics to know that they are a good investment. Even though my previous bank knew what the income would be, they just didn't want to know about goodwill when it comes to property.”

Rapid growth

It was a great relief to sort out the financial and ownership situation for Dr Hammer, as now the clinic is rapidly expanding. “We’re hiring more and more vets, and getting busier and busier,” he says.

That, of course, comes with its own set of challenges. The populations of regional areas have increased over the last year as people realised the advantages of remote work. And with those new arrivals comes new companion animals. “The population's increasing due to COVID,” he says, “and I think a lot of vet clinics in Australia are busier than ever. But besides that population increase, there have been lots of vets leaving the industry, unfortunately. So there's more work for fewer vets, which leads to mental health stresses. Those stresses are well known and discussed within the profession.

“It's hard to attract vets to regional areas. So we're busy on top of being busy, just because we’re short-staffed. To give you an idea, we’ve recently hired two new graduates, and it was near impossible to find them a rental property in town. I had to constantly be on the phone to various agents desperately trying to get them out of short-term accommodation. I was looking yesterday online to see what houses were for sale. There's only about six of them and they're all under offer. As soon as anything gets listed, they're snapped up quickly.”

Those problems aside, Dr Hammer is ready to move into the next phase of his career—finding and mentoring a replacement for his other partner. “My business partner wants to retire in the next few years, and we really want to attract a new vet or an experienced vet. The plan is to start doing exactly what I did, purchase his percentage of his shares and then totally take over his 50 per cent within a few years. But it is hard to attract vets to purchasing a business.”

But that isn’t affecting Dr Hammer’s plans. “I don't plan to go anywhere for a very long time” he laughs. “This is a great part of the world.”

Thinking about starting or growing your practice? Click on the link to find out more about our goodwill loan solutions for setting up a practice. Ready to take the next step? Contact us to find out how we can tailor a practice finance solution for you.


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