Quick answer
Optometrists commonly borrow for diagnostic equipment such as OCT scanners and retinal cameras, lens edging gear, frame and contact lens stock, shopfront fit-outs and the purchase of an existing practice. Equipment finance is usually the cheapest route for clinical machines, a line of credit suits stock, and acquisition or property-secured loans cover practice purchases. Banks favour established independents; non-bank lenders help when speed or flexibility matters.
Key points
- An optometry practice is part health clinic, part retail store, and lenders assess both halves differently
- Diagnostic machines hold value well enough for equipment finance, though rapid technology change shortens the term most lenders will offer
- Medicare's comprehensive consultation rules (every 36 months under 65, every 12 months from 65) create a predictable recall rhythm that buyers and lenders value
- Frame stock ties up cash quietly, so supplier terms and stock turn matter as much as the loan itself
Walk into almost any optometry practice and you’re standing in two businesses. Out the front is a store: frame walls, display cases, sunglasses, a dispensing desk. Out the back are consulting rooms with diagnostic equipment that can cost as much as a new car. Lenders see both, and the finance that suits one half rarely suits the other.
This page sets out how lenders look at optometry, what practice owners typically borrow for, and how to put a proposal together that gets a fast, fair answer.
What do optometry practices spend money on?
| Item | Why practices buy it | Finance that usually fits |
|---|---|---|
| OCT scanner | Imaging the retina and optic nerve to detect and monitor eye disease | Equipment finance, often over a shorter term |
| Retinal camera, visual field analyser | Recording and tracking eye health over time | Equipment finance or a finance lease |
| Slit lamps, phoropters, testing chairs and stands | Core consulting room equipment | Equipment finance, often bundled into one agreement |
| Lens edger and in-house lab | Faster turnaround and better margins on spectacles | Equipment finance |
| Frame and contact lens stock | The retail side of the business | Line of credit, supplier terms or working capital |
| Shopfront fit-out | Display, lighting, consulting rooms and accessibility | Equipment finance for fixtures, a general loan for building works |
| Buying a practice | Patient base, recall system, goodwill and equipment | Business acquisition loan |
The equipment finance calculator shows how term and any balloon payment change your monthly cost on a piece of diagnostic equipment.
How do lenders value a practice’s clinical income?
The clinical side looks reliable to most lenders, for reasons that are specific to optometry.
Medicare rules create a rhythm. A comprehensive initial consultation generally attracts a Medicare benefit once every 36 months for patients under 65, and once every 12 months for patients aged 65 and over, with other items covering changes in a patient’s condition. A practice that recalls patients systematically on those intervals has income it can forecast with some confidence. When a buyer or lender asks how strong the patient base is, a clean recall list with high return rates is the best answer you can give.
Lenders also like that eye care demand rises as the population ages, and that patients tend to stay with a practice they trust. The risks they weigh are competition from large chains in the same shopping centre, dependence on a single optometrist (often the owner), and expensive equipment that becomes dated within a few years.
What about the retail side?
Dispensing usually produces a large share of revenue and much of the profit, but it’s where cash gets stuck. Frames sit on display for months. Ranges change with the seasons, and slow lines are eventually marked down or returned if the supplier allows it.
A few practical points that shape your borrowing:
- Stock is weak security. Lenders rarely take frames as collateral, so stock is funded from cash flow, supplier terms or a business line of credit.
- Health fund rebates arrive quickly. Patients with extras cover often claim on the spot, so a lot of dispensing revenue lands within days. That makes bank statements look healthy.
- Watch stock turn. If your frame inventory is growing faster than sales, a bigger loan isn’t the answer; tighter buying is. Our guide to funding stock and inventory covers how to size stock finance sensibly.
Is a new OCT on your shortlist, or a practice that’s come up for sale? Ask about it here; it’s a quick form, and your credit score isn’t affected by asking.
Should you lease or buy diagnostic equipment?
This is a genuine choice for optometrists, more than for most health businesses, because imaging technology moves fast.
A chattel mortgage gives you ownership from day one and lets you claim depreciation and interest, but you carry the risk that the machine is worth little when you want to upgrade. A lease, with a set residual value at the end, can make it easier to hand back and upgrade on a planned cycle. Our comparison of leasing versus buying equipment walks through the trade-offs. The tax treatment differs between the two, so run both past your accountant first.
Risks lenders raise with optometrists
- Key person risk. A one-optometrist practice depends entirely on that person’s health and registration with the Optometry Board of Australia.
- Shopping centre leases. Rent reviews, outgoings and relocation clauses can squeeze margins; lenders read the lease for practices in centres.
- Payroll tax on contractor arrangements. Victoria’s State Revenue Office lists optometrists among the practitioners its “relevant contract” guidance can apply to where a practice engages contractor clinicians. Larger practices should check their position with an accountant.
- Equipment stacking. Several finance agreements with balloons falling due in the same year can create a cash crunch; stagger them where you can.
Banks remain the natural first stop for an established practice with good accounts and property security. When a practice ticks every box, bank money is usually the least expensive on offer. If they decline or can’t move in time, non-bank lenders that work from bank statements, equipment value and the patient base can fill the gap.
Documents to gather
- Optometry Board registration details for each optometrist
- Six to twelve months of statements from the practice account
- Equipment quotes or tax invoices, including model numbers
- Revenue split between consultations and dispensing, if your practice software can produce it
- Your lease, including any options and relocation clauses
- BAS lodgments, ATO account statement and recent financial statements
- When buying: the contract, the seller’s last two years of figures and recall data
Example: a country independent upgrading its imaging
Purely illustrative; not based on any real practice. An independent optometrist in a regional Victorian town has run the practice for nine years with one associate. Patients with diabetes and glaucoma are travelling over an hour for imaging, and the owner wants to keep that care local with an OCT scanner. The quoted price is around $78k installed.
The owner finances the OCT on a chattel mortgage over five years, keeping the balloon modest because the machine may be superseded before the end of the term. At the same time, the practice trims its frame range by a quarter, freeing cash that had been sitting on slow-moving stock. The new imaging service brings in referrals from local GPs, and the recall list gets longer.
Taking the next step for your practice
Optometry rewards owners who invest in the right equipment at the right time. When the bank can’t match your timing, there’s usually still a sensible way to make the purchase work.
Here’s how we handle it. The form takes about a minute to complete. No credit check happens because you’ve enquired. You won’t find your phone ringing with calls from lenders you’ve never heard of, because we keep your details in-house; one specialist reads what you’ve written and calls you personally. Please be specific about the equipment or practice, the amount and your timeframe, which helps us get the recommendation right on the first call.
Frequently asked questions
How do optometrists usually finance an OCT machine?
Most use equipment finance such as a chattel mortgage or a finance lease, with the machine as security. Recognised brands with a resale market are easiest to fund, and the term is often kept shorter than for simpler equipment because models are superseded quickly.
Can I borrow to buy an independent optometry practice?
Yes. Purchases are usually funded with a deposit, an acquisition loan and sometimes property security. Lenders look at the patient database, the recall system, how much revenue comes from dispensing, and whether the selling optometrist will stay on through a handover.
Will a lender fund frame and lens stock?
Stock is hard to use as security, so it's typically funded through a line of credit, an unsecured working capital loan or supplier terms rather than a dedicated stock loan.
Does my practice need to be registered for a loan?
Lenders will want to see that the optometrists providing services hold current registration with the Optometry Board of Australia, since that's what allows the practice to earn its clinical and Medicare income.
Is it better to lease or buy diagnostic equipment?
Leasing can make upgrading easier when technology moves quickly, while buying through a chattel mortgage gives you ownership and lets you claim depreciation. Your accountant can compare the tax effect for your situation.