Optometry practice guide
Optometry Practice Financing: Diagnostic Equipment and Practice Growth
The short answer
Diagnostic equipment such as OCT, retinal imaging and exam lane instruments often fits equipment financing. Frame inventory and the wait for insurance payments often fit a business line of credit, and larger projects such as a new exam lane, a build-out or a second office often fit a term loan.
It helps to know, before you apply, how much of your revenue arrives weeks after the visit, whether your medical eye care volume supports a new device and whether your frame board sells at the pace you buy it. Approval and terms are always the provider’s decision.
Share your equipment plans and payer mix, and an advisor can review what providers may offer.
By Correia FinancialOn this page
Why an optometry practice is paid on three different clocks
Many practices earn from three streams: eye exams, medical eye care and optical sales of frames, lenses and contact lenses. Each is paid differently. Patients pay their share at the visit or at eyewear pickup, while vision plans, medical insurers and Medicare pay later on their own schedules.
Medicare draws a sharp line between the streams. It excludes eye examinations for prescribing, fitting or changing eyeglasses or contact lenses for refractive error, and it excludes eyeglasses themselves except one pair of conventional eyeglasses or contact lenses after each cataract surgery with an intraocular lens. Medical eye care is billed under different rules, so the same exam lane earns from different payers depending on why the patient came in.
A general illustration. Timing varies by payer and practice.
- At the visit
Copays and eyewear deposits
Patients pay their share of the exam, and often a deposit on eyewear they order.
- After the visit
Claims go out
Your office bills vision plans for routine care and medical insurers or Medicare for medical eye care, each under its own rules.
- At pickup
Eyewear balance collected
Glasses come back from the lab and the patient pays any remaining balance.
- Weeks later
Plans and insurers pay
Reimbursements arrive on each payer’s schedule. Denied claims take longer.
- Within one year
Medicare filing deadline
Medicare claims generally must be filed within one calendar year after the date of service.
That spread is why a schedule full of patients can still leave the account thin before claims pay, and why a revolving line of credit suits the gap better than a lump sum.
Matching what you are planning to a financing structure
Select the situation closest to yours. These are general patterns; what a provider offers depends on your practice.
New diagnostic device
You want to add imaging so more medical eye care stays in your office instead of being referred out. The device should serve the practice for years.
- Equipment financingOften fits
The device can secure the financing, and payments can run over a period close to its working life.
- Term loanCan fit
Useful when the device comes with room changes, software and training you want funded in one amount.
- Line of creditUsually not the best fit
A multiyear asset would tie up the line you need free for insurance timing gaps.
Frame board refresh
You want to update a tired frame board before a busy stretch. The stock should sell and be replaced over the coming months.
- Line of creditOften fits
Draw for the order, repay as frames sell and draw again for the next one.
- Term loanUsually not the best fit
Years of payments for stock that turns in months means paying interest long after it sells.
Ask your frame vendors about their payment terms and compare them with the cost of a draw.
Slow insurance payments
Your schedule is full, but vision plan and medical insurance payments arrive well after the visit while payroll and lab bills come due.
- Line of creditOften fits
Draw to cover the gap and repay as claims pay. The gap repeats, so a revolving limit suits it.
- Equipment financingUsually not the best fit
It funds a specific asset, not a collections gap.
If denials or late filing are the cause, fix the billing process first.
A second exam lane
You plan to add an exam lane and hire an associate optometrist to see more patients.
- Term loanOften fits
One amount for the build-out and lane setup, repaid on a fixed schedule while the new schedule fills.
- Equipment financingCan fit
For the lane instruments themselves, kept separate from build-out costs.
- Line of creditCan fit
Alongside a loan, it can absorb payroll while the associate’s appointments build.
Diagnostic equipment: test the payment against medical eye care volume
Devices such as optical coherence tomography (OCT), retinal cameras and visual field analyzers support medical eye care more than routine refractions. Whether a payer covers a given test depends on its rules and the patient’s condition, so build the case from your own records: how many patients you refer out for imaging today, how many medical visits you see and what those visits have actually paid.
Equipment financing usually uses the device as collateral and spreads payments over a term closer to its working life. Get a quote that lists the device, software, installation, training and the service contract after warranty, because some of those costs may sit outside the financed amount. For refurbished or used units, ask about age and continuing service support; see used equipment financing.
If a vendor offers its own financing or a lease, compare total payments, any end of term purchase price and whether you own the device at the end. A lease that ends with a large buyout on a device you plan to keep can cost more than the monthly payment suggests; equipment lease buyouts explains the choices.
Frame inventory: buy to what patients actually purchase from you
Federal rules make optical sales something your practice earns, not something that comes with the exam. Under the FTC’s Eyeglass Rule, an optometrist must give the patient a copy of the eyeglass prescription immediately after the refractive exam and before offering to sell eyewear, may not make the exam conditional on buying eyewear and may not charge extra to release the prescription. Prescribers with a financial interest in selling eyewear must also ask the patient to confirm receipt and keep that record for at least three years.
Contact lenses follow similar rules. Prescribers must give patients a copy of the contact lens prescription after a fitting whether or not they ask, may not require them to buy lenses from the practice and must send the prescription to a person the patient designates within 40 business hours of a request.
So size the frame board to your own capture: the share of patients who buy eyewear from you and how many frames sell each month. Buying ahead of that pace ties up cash and credit in stock that ages.
Hypothetical example: refreshing the frame board
A practice buys 300 frames at an average cost of $80, or $24,000, drawn on a line of credit. It sells about 60 frames a month from the board and restocks only what sells, so the original order turns over in about five months and the draw is repaid from optical sales.
At a hypothetical 12% annual rate, carrying the full $24,000 for a month costs about $240 in interest, less as the balance falls. If capture slips and the practice sells 30 frames a month, the same stock takes about ten months to turn, interest runs about twice as long and some styles may age before they sell.
Round numbers for illustration only. This is not a quote, an offer or a typical rate, price or sales pace.
Before you draw for frames, ask your vendors about their payment terms and compare them with the cost of financing. To weigh a supplier deadline against a draw, see planning financing before a supplier discount deadline.
Insurance collections: what a line of credit can and cannot fix
A business line of credit can carry payroll and lab bills while claims are in process and be repaid as plans and insurers pay. It works best when the gap is a matter of timing, not of claims that never pay.
Watch deadlines and denials. Medicare claims generally must be filed no later than one calendar year after the date of service, and other payers set their own limits. If denials, missing information or late filing are the reason cash is short, financing only postpones the problem; tightening the billing process does more.
Selling insurance receivables is not a simple option in eye care. Medicare does not pay amounts due a supplier to anyone else under an assignment, a power of attorney or another direct arrangement, apart from narrow exceptions such as an employer or a billing agent that collects in the supplier’s name. That is one reason this guide treats a revolving line as the main option for collection gaps.
What providers may review for an optometry practice
No credit score, revenue level or time in practice works as a universal cutoff; each provider sets its own requirements. A review of an optometry practice often turns on how revenue splits across payers and how quickly it arrives.
Deposits and payer timing
How steady deposits are, and how much arrives from plans and insurers weeks after the visit.
Revenue mix
Exams, medical eye care and optical sales, and how each has trended.
Inventory
Frame and contact lens stock compared with what sells. Aging stock suggests over-buying.
Doctor capacity
How full each optometrist’s schedule is and how much revenue depends on one doctor.
Existing obligations
Equipment payments, leases, lines and any liens on practice assets.
What the money buys
Equipment quotes, build-out bids or a frame purchase plan.
Documents providers may request
The starting point is the last four complete months of business bank statements, which Correia Financial’s application asks you to upload. For equipment, providers usually want the vendor quote.
Larger requests may add business tax returns, a profit and loss statement, an accounts receivable aging by payer and a schedule of current debts. Our business loan requirements guide explains what each one shows a provider.
Costs to compare across lines, loans and equipment financing
On a line of credit, interest generally applies to what you draw, and some lines add draw, maintenance or unused line fees. Ask about the rate type, the review and renewal terms and what happens if the provider reduces the limit.
In California, many nonbank providers must present standardized disclosures. For a line of credit, the disclosure assumes you draw the full limit and shows the APR, estimated finance charge, total payments, payment, draw period, term and prepayment terms. For closed-end financing, it shows the APR, finance charge, total payment amount, payment, term and prepayment. Banks and other depository institutions are exempt from that rule, so request the same numbers from them directly.
For every offer, also note the amount you actually receive after fees, the collateral and any personal guarantee. Fees deducted from the proceeds count as cost. Money used to pay off an existing balance is not a fee, though it does leave you with less new cash. For the structural differences, see line of credit vs. term loan.
Adding an exam lane, an associate or a second office
Growth projects combine several costs: instruments for a new lane, build-out, hiring and the months before a new doctor’s schedule fills. A term loan can fund the defined project in one amount on a fixed schedule, with equipment financing for the lane instruments and a line of credit alongside for payroll while appointments build.
Test the plan at a slower ramp. If an associate’s schedule fills in a year rather than six months, the payments still come due, so size the request to the slower case. For leased space, see financing a tenant improvement project for how landlord allowances and lease terms fit in.
When financing may not be the right step
Referral volume is still low
If you refer out only a few imaging patients a month, a new device may not cover its payment. Keep referring until volume supports it.
The frame board is not turning
Aging stock calls for buying less, not borrowing more.
Claims are being denied
Fix eligibility checks, coding and filing before borrowing against slow collections.
Current lanes are not full
A second lane or office makes sense when the first is turning patients away.
Frequently asked questions
Can I finance an OCT or retinal camera?
Equipment financing can cover diagnostic devices and usually uses the device as collateral, though eligibility and terms vary by provider. Get a quote that includes software, installation and training, and test the payment against the medical eye care visits the device will support.
Should frame purchases go on a line of credit?
A line of credit often fits frame orders because the stock should sell within months and the draw can be repaid from optical sales. Buy to the pace you actually sell, and compare vendor payment terms with the cost of a draw.
Can I sell my insurance receivables to cover a cash gap?
Medicare does not pay amounts due a supplier to another person under an assignment or similar arrangement, apart from narrow exceptions, and other payers have their own rules. A line of credit repaid as claims pay is often the more workable bridge.
How does the FTC Eyeglass Rule affect optical revenue?
It requires you to give patients their eyeglass prescription immediately after the refractive exam and bars making the exam conditional on buying eyewear from you. Optical sales depend on patients choosing your dispensary, so plan inventory and any financing around your actual capture.
What documents should an optometry practice prepare?
Start with recent business bank statements. Larger requests may add tax returns, a profit and loss statement, an accounts receivable aging by payer, equipment quotes and a summary of current debts.
Is Correia Financial the lender?
No. Correia Financial brokers business financing. It explores options for your practice with third party providers, and each provider makes its own credit decision and sets its own terms.
Sources
- 16 CFR 456.2: Separation of examination and dispensingLegal Information Institute, Cornell Law School
- 16 CFR 456.4: Confirmation of prescription releaseLegal Information Institute, Cornell Law School
- 16 CFR 315.3: Availability of contact lens prescriptions to patientsLegal Information Institute, Cornell Law School
- 42 CFR 411.15: Particular services excluded from coverageLegal Information Institute, Cornell Law School
- 42 CFR 424.44: Time limits for filing claimsLegal Information Institute, Cornell Law School
- 42 CFR 424.80: Prohibition of reassignment of claims by suppliersLegal Information Institute, Cornell Law School
- Cal. Code Regs. tit. 10, § 911: Commercial Open-End Credit Plan Disclosure Formatting and ContentsLegal Information Institute, Cornell Law School
- Cal. Code Regs. tit. 10, § 910: Closed-End Transaction Disclosure Formatting and ContentsLegal Information Institute, Cornell Law School
- California Financial Code § 22801: exemptionsJustia
Sources reviewed October 12, 2026.
Related reading
Costs & ComparisonsBusiness line of credit vs. term loan: which fits?