Medical and dental equipment financing for practices

Medical, dental and veterinary practices buy equipment that is costly, specialized and often replaced as technology improves. Insurance reimbursements arrive weeks after the service, so cash flow can be tight even in a busy practice.

Common structures

• Equipment finance agreement for equipment the practice will keep for years, such as chairs, sterilizers and exam tables
• Fair-market-value lease for technology that changes quickly, such as imaging systems and lasers
• Deferred first payments for new practices and new locations, on approved deals

Soft costs matter

Installation, room shielding, electrical work, software, training and service contracts can be a large share of an imaging or dental technology project. Ask whether they can be included in the financing rather than paid in cash.

What lenders look at

Lenders consider the practitioner’s license and years in practice, practice revenue and collections, and personal credit. Newer practices may need a business plan or production projections for larger purchases. Practices joining or buying into an existing group may be underwritten on the group’s history.

Upgrading technology

When technology changes every few years, a lease can make upgrading easier: at the end of the term you return the old system and lease the new one, without having to sell used medical equipment yourself. If you plan to keep equipment for its whole life, owning usually costs less over time.

Working capital

Waiting on insurance payers is a classic working capital gap. Pairing working capital with an equipment purchase can carry a new location or service line until reimbursements catch up.

Taxes

Medical and dental equipment generally qualifies for Section 179 when financed with an EFA or $1-buyout lease. Use our Section 179 calculator for an estimate and confirm with your tax advisor.

All financing is subject to credit approval and documentation.