Optometry can be a lucrative career field with the median optometrist salary at $118,050 per year, according to the Bureau of Labor Statistics. Not only does it pay well, but it can be a rewarding career that helps people maintain proper eye care.
You could spend your career working for others at an established optometry practice, or forge your own career path by opening a new practice.
A huge student loan debt bill might have you second-guessing taking out a loan to start your own practice. The reality is that the equipment costs and other factors might make an optometry practice loan necessary to start your business.
Here's what to know about optometry practice loans and how they can help you launch an optometry practice, successfully.
How optometry practices work
Optometry practice giants like Lenscrafters, Pearle Vision, Target Optical, and other chains across the US are established brands. That doesn't mean there isn't room for more optometrist practices, but opening a new practice isn’t an easy task.
It might require between $150,000 to $500,000 to get your new optometry practice up and running during the first few years. Outside of recurring monthly operating costs, starting your practice from scratch includes expenses for:
- Construction costs
- Optometry equipment
- Optometry supplies inventory
- Office equipment (computers, phones, etc.)
- Advertising / marketing
Add in monthly costs like rent, utilities, and staffing costs, and you can see why it's considered a huge investment and one that's likely not profitable for the first few years. You could bypass some of these costs by investing in used equipment to start, or even purchasing an established optometry practice or office.
If you plan to start your own optometry practice, consider the costs involved. Plan for extra expenses along the way. If construction is involved, expect delays and increases in supply costs.
Practice Loan Quote Form
How a practice loan can help build an optometry practice
Perhaps the most important factor in launching a new practice is access to working capital. One way to cover startup and recurring costs is through financing. An optometry practice loan might provide the funding necessary to start your business and eventually become profitable.
A practice loan can also provide longer, flexible terms, sometimes up to 10 years or longer. Also, many private lenders that offer practice loans have dedicated staff to walk optometrists through the process, options to think about, and answer any questions you may have.
Types of practice loan financing
There are several types of practice loan financing available depending on your specific needs. Not all lenders offer the same loan types and services so always check before pursuing a loan. Here are some types of financing you can expect from a private lender with optometry practice loans.
Equipment or technology purchases
This type of loan allows you to use funds to purchase new equipment or upgrade existing equipment. This could mean optometry or clinical equipment or business equipment.
Commercial real estate loans
If you plan to purchase property for your business, real estate financing can fund purchases of an existing building or new construction. They can also help you make renovations to an existing office.
In some cases, you could also refinance existing construction debt, which could save money depending on your interest rate.
If you have existing debt from business credit cards, a line of credit or other types of practice loans, you might be eligible to refinance your debt. Refinancing can help consolidate your debt into one monthly bill and potentially save money in interest costs over the life of the loans.
Business lines of credit
A line of credit gives you access to cash for things like capital improvements, inventory purchases, and growth opportunities.
Some lenders may offer an overall loan covering various expenses incurred when starting a practice, including equipment costs and working capital.
This type of loan is specifically geared toward existing businesses that want to grow their business to other locations or relocate to a new location.
Practice equity loans
A practice equity loan allows you to use the equity built up to fund expansion, equipment upgrades, and other improvements or business changes.
You might have luck securing an SBA loan, in some cases. Another option is a loan to fund the acquisition of an existing optometry practice.
If you’re considering an optometry practice loan to fund your practice ownership dream, there are many options. However, the amount you can borrow depends on the lender and the lending option you choose.
Requirements for a practice loan
Needing a practice loan to get started and qualifying for one are two different things. Most private lenders that offer practice loans, unfortunately, don't publish underwriting requirements online. Borrowers like you are often left to guess whether they've done enough to qualify for financing.
Regardless of the lender, all financing is subject to credit approval. The lender will perform a credit check during the application process to determine eligibility. The better your credit score, the better your chances of approval, although other factors also influence a lender's decision. Your creditworthiness can also affect the loan amount, interest rate, and loan terms available to you. In some cases, you might be required to provide collateral to secure practice financing.
If you plan to open your own practice, it's also a good rule of thumb to:
- Have a decent amount of cash savings built up.
- Have a history of production.
- Pay down existing credit card debt.
- Be at least a year out of school before applying for a loan.
You might need to delay other life goals, such as buying a car or home, until after you've established your optometry practice.
Where to secure optometry financing for your practice
Not all private lenders offer practice loans. Depending on where you practice optometry, options are typically limited to a small group of traditional banks and credit unions. Some lenders that offer optometry practice financing include:
- Bank of America
- Wells Fargo
- Live Oak Bank
- United Midwest Savings Bank
During your search for practice financing, look for lenders that offer other practice loans, such as dental or medical. They might also offer an optometry business loan, too.
As you talk to a loan specialist, ask about specific requirements you need to meet and any fees or penalties that accompany a practice loan. Also, ask if you qualify for any available discounts.
For more optometry practice loans in your area, check out our guide to practice loan options by state.