The employment rate for optometrists is projected to grow 18% between 2016 and 2026. This outpaces the average for other professions, and is good news for you. Experts agree that the aging American population and the resulting vision problems leading to a higher demand for optometrists.
If you are looking to take advantage of this projected boom and grow your practice, you owe it to yourself to consider utilizing a SBA 504 (Small Business Administration) loan. This loan program partners with conventional lenders to provide optometry practice owners with affordable financing to purchase real estate. The 504 loan rate loosely follows Treasury issue rates and is consistently lower than market rates which makes it a great option for anyone looking to expand their optometry practice.
How Dr. Yamanaka Utilized A 504 Loan For Her Optometry Practice
Dr. Yamanaka owner of Los Alamitos Optometry has been a leading optometrist in the Los Alamitos, California area for over 27 years. She maintains active membership in professional organizations such as the California Optometric Association and the American Optometric Association. She also serves as an expert examiner for the National Board of Optometry. Her provides a full scope of services including contact lenses, ocular disease detection and refractive surgery consultations.
When Dr. Yamanaka was trying to finance her optometry practice, she was able to work with TMC Finacing, a premier Certified Development Company (CDC), that was able to help her obtain financing for a $1.2 million project. At the time she was leasing space from a landlord for her optometry practice, but she is now a proud property owner, thanks to TMC and the SBA 504 loan program.
SBA 504 Loan Real Estate Financing for Your Optometry Practice
If you have found the need to seek out other financing options outside of traditional banks and brokers to find financing for your optometry practice, then the 504 loan program might be able to help address that financing need.
The 504 loan provides affordable financing for optometry practices and encourages lending by conventional lenders (banks and credit unions) by providing them with low-risk conditions. The 504 loan program partners a nonprofit CDC with a conventional lender to provide a loan in three parts:
- The first is a loan from a conventional lender—a bank or a credit union—for 50% of the total project cost. The amount and conditions of that loan are determined separately, and it becomes the first mortgage. TMC can help match your optometry practice (the borrower) with the perfect banking partner for this loan, if requested.
- The CDC facilitates a separate SBA loan of 35% of the total at a fixed, below-market rate. This is the second mortgage for your optometry practice.
- The optometry practice owner and/or partners (the borrower) contribute 15% to the loan as down payment.
The 504 loan has a 10- or 20-year term, with a 25-year option recently included. It is fully amortized (so there are no balloon payments).
A 504 loan can be used to:
- purchase land or buildings for your optometry practice
- construct, improve or upgrade the optometry practice building
- purchase equipment with a service life of ten years or greater
- refinance conventional debt
There are also sustainability initiatives you can take to qualify for the SBA Green Energy Program, which will give you access to increased financing.
Making sure you are set up to best serve the growing population seeking an optometrist is important. The SBA has acknowledged you provide a valuable resource, and is ready to help. You can find out more about 504 loan financing and the Green Energy Program from one of TMC Financing’s 504 loan experts. TMC is an SBA Premier Certified Lender and a high-volume loan provider. With over 35 years of experience, TMC can help you find the financing that is best for your optometry practice and guide you through the 504 loan process. Contact TMC Financing today.
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- Turn Equity Trapped in Real Estate into Cash with the SBA 504 Program - April 23, 2020