Larkpine Lending Group, an Iowa City, IA small-business funding service, explains how buying an optometry or chiropractic practice is funded: what the price includes, from equipment and frame inventory to patient records and goodwill, which parts partners finance with term loans or equipment financing, and what to ask the seller first.
What the price of a practice is made of
| Piece | What it is | Usual funding |
|---|---|---|
| Equipment | Exam lanes, tables, imaging, edgers, rehab equipment | Term loan, or equipment loan for the machines |
| Inventory | Frames, contact lenses, supplements | Term loan, sometimes inventory financing |
| Receivables | Claims billed but unpaid at closing | Usually stays with the seller or is priced separately |
| Patient records and goodwill | The patient base and the practice's reputation | Term loan, possibly alongside a seller note |
| Lease | The right to stay in the space | Not financed; negotiated with the landlord |
Optometry business loans versus chiropractic business loans
An optometry practice carries frame and lens inventory and may run a retail optical, so its revenue mixes exams billed to insurers with retail sales. A chiropractic or therapy practice has little inventory and more visits per patient. Partners read the two differently: optical inventory and retail margins for one, visit volume and payer mix for the other.
Both appear in the same Census category. Johnson County, IA had 123 offices of other health practitioners in 2023 (NAICS 6213), 62.6% of them with fewer than five employees (County Business Patterns 2023). The practitioner funding page covers the day-to-day cash cycle.
How to get financing to buy a business like a practice
- Get the seller's collections by month for several years, by payer.
- Get active patient counts and how many return each year.
- List the equipment with ages and service history.
- Read the lease: remaining term, renewal options, assignment clause.
- Ask whether the seller will stay on for a transition period, and on what terms.
- Ask whether the seller will finance part of the price.
With those in hand, the purchase is usually a term loan, with seller financing and equipment financing for any new equipment you add after closing.
Illustration: splitting a purchase (not an offer)
Illustration only: a buyer agrees a price of $400,000 for a practice. The seller carries $60,000 as a note paid after the partner's loan, and the buyer puts in $40,000. A partner is asked for $300,000 over a term matching the practice's ability to pay. Separately, the buyer plans $45,000 of new exam equipment in year one, financed as equipment rather than added to the purchase loan.
Questions that change the answer
- Will patients follow a new owner? A seller who stays a year helps.
- Are the main insurance contracts transferable, or must the buyer credential again?
- Is the frame inventory current, or full of discontinued lines?
- Are there associate doctors whose departure would take patients?
What we cannot tell you
We cannot value a practice, advise on deal structure or review the purchase agreement. Use a practice valuation professional, your accountant and your attorney. County figures for context are on the Iowa City, IA page; more articles are on the blog.
After closing: the first year's cash
The first months after a purchase need their own budget. Insurance contracts may need re-credentialing under the new owner, claims can slow while that happens, and patients test the new relationship. Budget working capital for that stretch separately from the purchase loan, and plan equipment upgrades for after the practice has settled rather than at closing.
By Larkpine Lending Group · Updated