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    The Gap in Lending: Why Banks Ignore Pet Care Businesses

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    Boarding and kennel operators generate real cash flow and still get turned down by conventional lenders. Robert Capelli explains why the category falls outside standard bank credit boxes and why that gap is where private credit earns its spread.

    • #privatecredit
    • #lending
    • #petindustry
    • #alternativeinvestments
    • #smallbusiness

    From the full episode

    Inside a New Private Credit Asset Class: Dog Boarding and Kennels

    We could promise what the interest rate would be based on us lending the money out and not worrying about equity on a sale down the road.
    Listen to the full episode with Robert Capelli

    Frequently Asked Questions

    Why won't banks lend to dog boarding and kennel businesses?
    Robert says the only real credit facility in the space is the SBA, through its 7(a) and 504 programs, and banks and credit unions simply route these borrowers there. The category never got its own product, so outside seller financing there was effectively no alternative lender.
    What are the limits of SBA lending for kennel operators?
    Each borrower is capped at about $5 million, and Robert estimates the SBA turns down roughly 60 to 70 percent of loans in this space. Total SBA originations in the category run about $200 to $250 million a year.
    How does Canine Capital fill that gap?
    It lends as a bridge — a three-year interest-only package that gives an operator time to build experience and credit before rolling into a 25- or 30-year SBA loan on better terms.

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