Your personal balance sheet built the practice you acquired. Structured correctly, it does not need to guarantee the capital that acquired it. Lumina engineers non-recourse and limited-recourse capital structures that isolate professional investment risk to the practice entity — not the practitioner.
Initialize Practice Equity AssessmentMost optometrists accept full personal recourse on acquisition capital without understanding that the capital structure is negotiable. Lumina Medical Capital maps every client's transaction against the full recourse spectrum — and structures the most protective position the deal economics will support.
Lender has full claim against all personal assets — primary residence, retirement accounts, personal investments — in the event of default. Standard for SBA 7(a) acquisition capital. Protectable through proper entity structuring, life/disability insurance, and covenant management.
Personal guarantee capped at a defined dollar amount (typically 25–50% of principal), or limited to specific assets (real estate only, or operating account only). Negotiable on conventional and USDA business loan structures; rare but achievable on SBA with specific lender relationships and strong deal economics.
Lender's recovery is limited entirely to the pledged collateral — the practice assets and cash flows — with no personal guarantee whatsoever. Available on stabilized multi-location platforms with ≥$3M EBITDA, strong covenant history, and institutional-grade operations. Rare in single-practice transactions; achievable in PE-structured roll-ups.
Non-recourse capital is not granted — it is earned through demonstrated operational metrics, entity architecture, and capital covenant compliance. Lumina maps the specific milestones that move a practice from full-recourse acquisition capital to limited or non-recourse refinancing.
Regardless of recourse structure, isolating the practice inside a properly capitalized LLC or PC — separate from all personal assets — limits practical recourse even when legal recourse exists. A lender pursuing a guaranteed debt still must exhaust business assets first; clean entity structure with no co-mingling ensures the personal guarantee is a last resort, not a first resort.
Demonstrating 12+ consecutive months of DSCR ≥ 1.35x, clean audit trail, and zero covenant violations creates the performance history required to negotiate limited recourse on a refinancing event. Most lenders will consider removing or capping a personal guarantee when the practice has demonstrated self-sufficiency through at least one full business cycle post-acquisition.
As practice EBITDA grows, the loan-to-value ratio against practice assets declines. When LTV drops below 60%, a lender's security position is adequately protected by collateral alone — creating the economic basis for removing the personal guarantee. Equipment upgrades, leasehold improvements, and patient panel growth all increase the collateral value supporting the recourse argument.
The refinancing event is the primary mechanism for transitioning from full to limited or non-recourse. A well-timed refinance — when rates are favorable, EBITDA has grown, and LTV has declined — allows the borrower to restructure both rate and recourse simultaneously. Lumina prepares clients for this inflection 18–24 months in advance to maximize negotiating leverage.
Practices that own their clinical real estate present the strongest non-recourse collateral position. Medical office real estate in Maricopa County has appreciated 18–24% over 2021–2025; a practice owning a 2,500 SF Scottsdale medical condo at $320/SF holds $800K of hard-asset collateral entirely independent of goodwill.
Practices with ≥30% Medicare revenue can pledge Medicare A/R as collateral — a highly liquid, government-guaranteed receivables stream that lenders treat as near-cash collateral. Medicare A/R assignment is a key lever in transitioning working capital lines from personal-guarantee to asset-secured structures.
A fully equipped diagnostic suite — OCT ($85K), visual field ($28K), corneal topographer ($22K), fundus camera ($18K), dry eye platform ($48K) — represents $200K+ of hard-asset collateral at current market. Equipment portfolios support independent equipment finance lines that reduce the principal balance requiring personal guarantee coverage.
A documented patient panel of 3,500+ active patients with verifiable recall rates above 68% and multi-payer revenue (not concentrated in a single insurer above 40%) represents a durable cash-flow asset that institutional lenders increasingly treat as pledge-eligible goodwill in non-recourse valuations.
Non-recourse structuring is one dimension of acquisition capital design. Explore the complete acquisition capital stack — senior debt, seller notes, equity injection, and working capital — for Arizona optometry transitions.
Explore Acquisition Capital →Every acquisition capital structure carries a recourse position. Lumina engineers the most protective structure available for your transaction — and maps the path to refinancing it out entirely.
Initialize Practice Equity Assessment