Eye Care Practice
Financing Options

Financing Guide — 2026 Edition

Six Routes to Practice Ownership. One Decision That Shapes Your Economics for a Decade.

Approximately 68% of all optometry practice acquisitions close with SBA 7(a) financing. The other 32% use conventional bank debt, alternative lenders, seller notes, equipment-secured capital, or some combination of all five. The financing route you choose determines your monthly cash flow burden, your equity-build pace, and how much of the practice's EBITDA you actually keep after debt service.

Most buyers start with the SBA because it is what their accountant knows. That is not wrong. SBA 7(a) carries the lowest down payment requirement — as little as 10% — and the broadest loan amounts in its class, up to $5 million for practice goodwill and working capital combined. But it is not always the cheapest capital. It is not always the fastest. And for practices priced above $5 million, or those with specific balance sheet structures, SBA is a ceiling, not a solution.

This guide covers every credible financing path for eye care practice acquisition in 2026, with actual rate ranges, down payment norms, term lengths, and the scenarios where each instrument fits — and where it breaks. For context on how financing connects to total transaction structure, see our guide to OD acquisition financing.

Program Detail

Conventional Bank Loans and Credit Union Programs

Conventional healthcare lending moves faster and generates less paperwork than SBA programs. A healthcare-specialist bank can close an acquisition loan in 30–45 days compared to 60–90 days for SBA. The tradeoff is a higher down payment requirement — typically 20–25% — and tighter underwriting criteria that exclude practices with thin or inconsistent EBITDA margins.

Rates for conventional healthcare practice loans currently run 7.0–10.0% depending on the borrower's credit profile, collateral position, and the bank's current healthcare lending appetite. Many regional banks and credit unions have dedicated healthcare divisions that understand goodwill-based valuations and will lend against them without requiring tangible asset coverage equal to the loan amount.

Credit unions occasionally offer practice acquisition loans at rates 50–100 basis points below comparable bank rates. The catch: underwriting volume is lower, healthcare deal experience varies widely by institution, and the timeline can stretch unpredictably when deals fall outside their standard parameters.

Conventional is the right call when speed matters, when the buyer has substantial personal liquidity to cover a larger down payment, or when the practice's EBITDA is strong enough that a lender has no need for government guaranty to underwrite the risk. Many established ODs acquiring their second or third practice choose conventional over SBA for this reason.

Program Detail

Non-Bank Lenders and Alternative Financing for Eye Care Practices

Non-bank healthcare lenders serve buyers who don't meet SBA or conventional underwriting thresholds — subprime credit (below 650), short business history, or practices with irregular cash flow documentation. They move fast: some close in under two weeks. The cost is real, typically 12–24% APR with origination fees of 1–5%.

Two specific scenarios warrant serious consideration of non-bank financing. First, bridge situations where a deal needs to close quickly before conventional financing is assembled — the non-bank loan holds the transaction while SBA underwriting completes. Second, situations where the practice has strong revenue but low documented EBITDA because of recent owner draws or aggressive expense recognition. Non-bank underwriters often look at revenue-based serviceability rather than EBITDA coverage ratios.

Healthcare revenue-based financing deserves a specific note. Some lenders offer capital secured against accounts receivable, insurance reimbursement forecasts, or future VSP/EyeMed collections. This is functionally a factoring arrangement and carries the highest effective APR of any instrument discussed here. Use it only when no alternative exists and the payoff timeline is under 18 months.

Program Detail

Seller Financing and Mezzanine Capital

Seller financing is a negotiated note where the selling OD accepts a portion of the purchase price over time rather than at close. Typical terms: 10–20% of purchase price, 4–8% interest rate, 3–7 year term, often on standby for 24 months at the SBA lender's request. It is the single most effective way to bridge an equity injection shortfall without diluting the buyer's return.

Many sellers resist the idea initially because they associate it with buyer credit weakness. The right frame: a seller note is evidence of the seller's confidence in the practice they built. Buyers who can articulate it that way close seller note arrangements in more than 60% of negotiations where they raise it directly.

Mezzanine capital sits between senior debt and equity in the capital stack. At 15–25% blended cost, it is expensive. But for buyers attempting a larger recapitalization — buying out a partner's equity in a multi-OD practice, or acquiring a second location before the first is fully paid down — mezzanine fills the gap between what senior lenders will lend and what the buyer needs. See our analysis of partner buyout loan structures for cases where mezzanine is necessary.

Decision Framework

How to Choose the Right Financing Structure for Your Eye Care Practice

Start with the practice's EBITDA. That number determines how much debt service the practice can support after the new owner takes a market-rate salary. A practice generating $280K adjusted EBITDA with an owner drawing $160K leaves $120K for debt service — roughly $10K per month. That number tells you exactly what loan amount and term structure is sustainable before you submit a single application.

The DSCR (Debt Service Coverage Ratio) most SBA and conventional lenders require is 1.25x. That means for every $1 of annual debt service, the practice must generate $1.25 of net operating income. On a $1.2M SBA loan at 12% over 10 years, the annual debt service is approximately $158K. To satisfy 1.25x DSCR, the practice needs $197K of net operating income after the owner draws a market salary.

For larger transactions — especially those involving DSO or PE buyers, or Scottsdale corridor acquisitions above $3M — the capital stack typically layers instruments. Senior SBA or conventional debt covers 70–80% of the purchase price, a seller note covers 10–15%, and remaining equity injection comes from the buyer. Understanding this layering is why acquisition financing advisory adds disproportionate value on larger transactions.

Non-recourse structures deserve a separate evaluation for practices with EBITDA above $500K. When the loan is collateralized by the practice's cash flows rather than the buyer's personal assets, the risk profile changes fundamentally. See our analysis of non-recourse OD loan structures for the qualification criteria and lender universe.