How do you finance buying an optometry practice?

Two businesses in one practice

A typical practice earns from eye exams, from medical eye care and from the optical: frames, spectacle lenses and contact lenses. Each line has a different payer, a different margin and a different risk when the owner changes, so a lender breaks the collections out before it looks at total earnings.

The optical is often where the profit is, and it depends on how many exam patients buy their glasses in the office rather than taking the prescription elsewhere. A lender will ask for optical sales per exam over several years. A falling ratio tells the lender that the practice is losing its most profitable line even while exam volume holds.

The doctor is the practice

Patients return to an optometrist they trust, and many have seen the seller for years. In a solo practice, the seller may perform nearly every exam. The lender's question is how many of those patients will book with the buyer. It is answered from the practice-management system, not the tax return: active patients, new patients each month, the recall system that brings patients back on schedule, and collections by doctor.

• Production by doctor. In a practice with associate optometrists who are staying, a large share of the patients already see someone other than the seller. That lowers the transition risk more than any other single fact.
• The seller's role after closing. Many selling optometrists want to keep seeing patients part-time for a few years. In a complete change of ownership financed by SBA, the seller may not stay as an owner, officer or employee; the seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026. See the seller transition rule. A longer clinical role means a partial change of ownership or a conventional practice loan.
• The non-compete. Lenders expect the seller to agree not to practice nearby for a period after the sale, on terms enforceable in the state.
• Staff. Opticians, technicians and front-desk staff hold relationships of their own and run the optical. A lender asks who is staying.

Our page on buying from a retiring owner covers the transition more generally, and financing goodwill explains why the patient base is what most of the loan is lent against.

Licensing, ownership and credentialing

Several things must be in the buyer's name before the practice can earn what it earned for the seller.

• Who may own the practice. Many states restrict ownership of an optometry practice to licensed optometrists or physicians. A non-doctor buyer usually needs a management structure that lenders and the state both accept, and many lenders will only finance a licensed buyer. Check the state's rules before the letter of intent.
• Vision and medical plan credentialing. Plans contract with individual doctors and practice entities. In an asset purchase, the buyer and the buyer's company usually must be credentialed and enrolled, including with Medicare where the practice bills it. Until that is done, claims for the buyer's work may not be paid. Lenders ask when applications were filed and want the timing built into working capital.
• Patient records. Records transfer under the purchase agreement and privacy rules; the lender cares that the recall system and patient history come with them.
• Frame and lab accounts. Frame vendors and optical labs extend credit and pricing to the practice. Some frame boards are on consignment or vendor programs rather than owned inventory, which changes what the buyer is actually paying for.

Start vision and medical plan credentialing as soon as the letter of intent is signed. A buyer who closes before the plans recognize them can do the exams and wait weeks to be paid for them.

Optical inventory, equipment and the office

Frames and contact lens stock are real inventory, but frames go out of style and discontinued lines sell only at a discount. The usual approach prices owned, current inventory at cost by physical count at closing and excludes or discounts old stock; see working capital pegs.

Diagnostic equipment such as exam lanes, retinal imaging, optical coherence tomography and visual field analyzers is expensive and, in newer practices, often leased or financed. If the buyer assumes them, their payments count in debt service alongside the acquisition loan. Older equipment may need replacing soon after closing, and lenders deduct a normal replacement reserve from cash flow; see equipment financing versus an SBA 7(a) loan. Used diagnostic equipment is modest collateral, which is why the loan rests on cash flow.

The office. A leased office should be assigned with the landlord's consent and run, with options, as long as the loan; see lease assignment. Some sellers own the building or a condominium unit. A 7(a) loan can finance it over up to 25 years, and SBA 504 finances owner-occupied real estate where the practice occupies at least 51% of an existing building. See acquisitions with real estate.

How the loan is sized

The lender adds back the seller's pay and personal or one-off costs to reach what the practice earns before its owner. It then deducts the cost of the doctor who will do the seller's clinical work. If the buyer replaces the seller in the chair, that is a market salary for the buyer; if the buyer will manage and hire an associate, it is the associate's pay. Then it tests that cash flow against every payment the practice will make: the new loan plus any equipment leases or loans the buyer takes over.

SBA requires debt service coverage of at least 1.15x, and 1.0x globally once the owners' personal finances are included; from 1 October 2026 a change of ownership must show 1.25x on historical results. Conventional banks commonly look for at least 1.25x. A buyer's personal obligations, including student loans, count in the global test, which is often where a newly practicing optometrist's file gets tight. See global cash flow.

SBA 7(a) or a practice lender

Some banks run healthcare practice lending programs that lend to licensed doctors on conventional terms. They lean heavily on the buyer's license and the practice's collections history and may ask for less buyer equity than SBA does, but each sets its own terms. SBA 7(a) suits buyers who need a longer amortization, have less cash, or are buying real estate with the practice.

Under SBA, a seller note counts toward the equity injection only on full standby for the life of the loan; a note that pays currently is allowed but is debt. The loan for the purchase cannot exceed the independent valuation. That matters where optometry groups backed by investors are bidding for practices: a price set by a group buyer may be more than an appraiser supports for an individual doctor's loan. From 1 October 2026, financial due diligence is required on every change of ownership, and a quality of earnings report on acquisitions of $3 million or more excluding real estate.

The file a lender needs

Transparent's SBA acquisition checklist, with the items lenders ask for in an optometry deal:

• Business tax returns, 2–3 years, and the filing extension if the latest year isn't filed
• P&L and balance sheet with the latest full year of figures (never an older year), and a year-to-date P&L through last month-end
• Collections by category (exams, medical, optical, contact lenses) and by doctor, for three years
• Active patient count, new patients by month, and the payer mix
• Insurance receivables aging
• Frame and contact lens inventory, and any consignment or vendor programs
• Equipment list, with leases and loans on it
• Debt schedule, with copies of notes being paid off
• Personal tax returns, 2–3 years, and a personal financial statement for each buyer owning 20% or more
• The letter of intent, the lease, and the buyer's license and credentialing status
• The buyer's resume (supports Form 1919)

With those in hand, Transparent builds the full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day; by hand, it takes at least a week. The model separates clinic from optical, credits the associates who are staying, and carries the credentialing gap in working capital. It goes to lenders in our book whose appetite fits: 278 write SBA 7(a) and 504 and 1,148 write term and private credit. See the package and our SBA data page for offices of optometrists.