Optometrist Graduates Become Business Owners Quicker through Business Loan Program from Vision One CU, VSP

SACRAMENTO, Calif. - The mountain of student loan debt that optometrists often face fresh out of school may not be so intimidating thanks to a program co-sponsored by Vision One Credit Union. The Vision One Loan program is an alliance between the $27 million credit union and VSP here, an eye care benefit plan provider with more than 40 million members. Launched in 2003, the loan program is aimed at recent optometry graduates who want to acquire a practice or a partnership in an existing practice. Up to 100% financing is available with variable or fixed rates and terms up to 10 years. VSP has committed $5 million to the plan but will not benefit financially from the loan program, as all repayments will be returned to the fund to help provide loans to other doctors, according to the company. So far, the program has loaned $7 million to roughly 30 optometrists in California and 12 other states including Oregon, Idaho, Colorado, Indiana, Washington and Texas. The program is scheduled to expand nationwide in three to five years. "Our SEGs are optometrists so it just made sense to get together with VSP to make this available," said Robert Schultz, president/CEO of Vision One. Indeed, Vision One CU serves a unique niche industry: optometrists and ophthalmologists licensed in California; members of the Colorado and Ohio Optometric Associations and their staff; Vision Service Plan employees; employees of vision care related companies; and family members of Vision One CU employees. It currently serves more than 2,600 members. One of the goals of the Vision One Loan program is to simplify and accelerate entry into private practice ownership by allowing first time purchasers the ability to buy a practice even though they have minimal to no personal assets. The loans, which are available to first-time private practice purchasers, can be used towards a down payment or a partnership acquisition. As a condition, applicants must join the credit union. Schultz said other benefits of the program include the reduction of business risk for junior partners because senior partners can serve as mentors. It also creates an option for senior partners to gradually transition into retirement while retaining control of the practice by selling a minority interest now and the remaining interest at a future date. "We're seeing a lot more that are buying their practices" compared to buying into a partnership, Schultz said. "The economies of scale of a large practice make more sense. There was a need to get people into that ownership that previously wasn't there." Schultz said the credit union uses an SBA loan to guarantee its portion but setting up such a program that serves a special group may not be for every credit union. "SBA loans are certainly something credit unions can replicate. It might be harder for a community-based credit union to do," he said. The loan process also serves as a sort of introductory course for new professionals by helping them understand cash flows and orienting cash flow requirements to support the practice acquisition debt and living expenses. Schultz said it also demystifies the acquisition process and "offers a friendly, supportive environment in which to enter private practice ownership." Vision One Credit Union's well-known presence within the optometry field has helped the program gain momentum, said Bruce Medine, VSP board chairman and an optometrist based in San Francisco. Since its founding in 1951, the credit union has invested more than $250 million in optometry in California. -msamaad@cutimes.com