Finance for medical and dental equipment: chairs, scanners and the tech that dates fast

Few small businesses spend like a health practice. A single dental chair unit, an intraoral scanner and a CBCT imaging system can add up to the price of a house deposit, and the first two are pieces of technology that a vendor will call “end of life” within a decade.

That combination of high cost, steady income and fast-moving technology shapes how medical and dental equipment gets financed in Australia. This guide covers what lenders see, how to choose a structure, and the questions that save the most money.

Why do lenders like health practices, and where do they hesitate?

Lenders tend to view medical, dental, allied health and veterinary practices favourably. Patients return, billing is regular, practitioners are registered professionals, and the equipment is valuable and well known. A practice with several years of trading and clean tax returns will often find a bank willing to fund equipment on competitive terms, and that route is always worth testing first.

The hesitations are more specific than general risk:

• Technology risk. Imaging systems, scanners and lasers depreciate faster than a chair or an autoclave. The resale market for specialist software-driven kit can be thin.
• Practitioner dependence. Many practices rely on one or two principals. If a dentist or GP leaves or becomes unwell, income falls. Lenders may ask about key-person cover.
• Ownership structure. Who actually buys the equipment matters, as we cover below.
• New practices. Without trading history, the application leans on the practitioner’s experience, a lease, a budget and often a guarantee.

If your bank has said no, or the process is too slow for a fit-out date, specialist asset financiers are the next place to look. Equipment finance explains the family of products.

Which structure suits which equipment?

Equipment	Typical life in practice	Structure to consider	Why
Dental chair units, operatory furniture	Long	Chattel mortgage or hire purchase	Durable; you’ll use it for years
Digital X-ray, OPG, CBCT	Medium; software and sensors date	Chattel mortgage with a moderate term, or a lease	Avoid owing more than it’s worth in year five
Intraoral scanners, milling units	Short to medium	Lease or shorter-term finance	Upgrade cycles are quick
Ultrasound, ECG, spirometry	Medium	Chattel mortgage or hire purchase	Steady value in secondhand market
Autoclaves, compressors, suction	Long	Chattel mortgage	Mostly utility equipment
Fit-out, cabinetry, reception	Tied to the premises	Fit-out loan or term loan	Not easily repossessed, so lenders view it differently

For the structures themselves, see chattel mortgage, hire purchase, and the comparison of leasing versus buying equipment. The core trade-off is simple: ownership suits kit you’ll keep, and leasing suits kit you’d want to swap.

How long should the term be?

A common mistake is aligning the term to the cheapest monthly figure. Instead, align it to how long you’ll actually use the equipment before upgrading.

If you’d replace an intraoral scanner in four years, a seven-year loan leaves you paying for a scanner you no longer use. A five-year term with a modest residual, or a four-year lease with an upgrade option, fits better.

The ATO publishes effective life determinations that set how long various assets are assumed to last for tax. Those figures drive depreciation, not what the equipment is worth in a sale, but they are a useful reference when checking whether your term runs longer than the asset’s assumed life. Your accountant can look up the current figure for your equipment.

Who should own the equipment: practitioner, service entity or practice?

This one trips up many practices. Dental and medical practices are often structured with separate entities: a practice company or trust that employs staff and holds the lease, and practitioners who operate as sole traders, partners or through their own trusts and pay the practice a service fee.

Lenders will ask which entity is the borrower and who is guaranteeing. If the equipment is financed in the practitioner’s name but used by the practice company, there can be mismatches in who claims deductions, who pays insurance and what happens when a practitioner leaves. Settle it with your accountant before the quote goes to a financier. It’s easier to design the structure up front than to unwind it later.

Two related points:

• GST: health services are generally GST-free, which is not the same as input-taxed. A GST-registered practice can usually still claim credits on equipment purchases, but your accountant should confirm how it applies to your mix of services.
• A shared-equipment arrangement between associates should be written down. If one practitioner leaves, the finance stays.

What can be financed beyond the machine itself?

Lenders generally fund the asset and the costs that make it usable. Ask the supplier to itemise the quote.

• Usually included: the equipment, delivery, installation, commissioning and initial training, where these appear on the supplier’s invoice.
• Sometimes included: certain software licences that are bought outright with the hardware.
• Rarely included: monthly software subscriptions, cloud storage, service plans and consumables. Budget for these as running costs.

Also consider the room. A new imaging system might need lead lining, plumbing, electrical work or a radiation compliance review. Those building costs often sit outside equipment finance and may need a separate fit-out or term loan. Our guide to cash flow for medical practices helps you plan the total outlay.

Planning a purchase and not sure which parts the financier will fund? Send us the quote details and we’ll tell you how it would usually be structured.

What do financiers want to see?

For an established practice, expect to provide:

• the supplier’s quote or invoice, itemised
• two years of tax returns and financial statements, or recent BAS and bank statements
• details of existing finance
• ABN and entity details, and identification for directors
• for imaging and larger units, sometimes the installation timeline and any council or regulatory approvals

For a new practice, add:

• the practitioner’s qualifications, registration and work history
• a signed or proposed lease for the rooms
• a budget showing patient numbers, fees and expenses
• any deposit you’ll contribute, as it counts a lot with no trading history

Our guide on equipment finance for new businesses covers the start-up angle in more depth.

A worked example: a two-chair dental practice adding imaging

An illustration only. A two-dentist practice has traded for six years and wants to add a CBCT unit and an intraoral scanner for a combined $168k, with $12k of installation and training on the same quote.

The supplier offers its own finance, and the practice’s bank offers a chattel mortgage. The accountant suggests splitting the deal because the two items age differently:

• The CBCT unit goes on a chattel mortgage over five years, with a modest balloon, because its value holds better and the practice plans to use it for a long time.
• The scanner goes on a shorter four-year lease with a planned upgrade, since the scanning software and hardware move quickly.

They compare total dollars paid rather than the monthly figure, and notice that the supplier’s bundle looks cheaper per month but costs more over its longer term. The practice’s company is the borrower, with the two principals giving guarantees. Settlement happens the week before installation, with the supplier waiting for confirmation of funds.

The learning: splitting the purchase by how quickly each item dates produced a better fit than a single seven-year deal.

What mistakes should you avoid?

1. Letting the supplier’s finance be the only quote. It may be fine, but it’s one quote.
2. Financing technology over the whole of its useful life. If it dates in four years, don’t borrow for seven.
3. Forgetting the ongoing costs. Software subscriptions and service plans sit on top of the repayment.
4. Ignoring the entity question. The wrong borrower creates tax and exit headaches.
5. Skipping a PPSR search on used equipment. A refurbished unit may still be security for someone else’s loan. Our PPSR glossary entry explains why it matters.
6. Underestimating the room costs. The machine is rarely the whole bill.

Getting the finance matched to the practice

Whether you’re adding one scanner or fitting out a new clinic, equipment finance works best when the structure suits both the kit and the practice’s finances. A short form is how we start: it takes about a minute and leaves your credit file untouched, so there’s no downside to asking. Your details aren’t circulated to a stack of financiers. A person reads your enquiry, looks at the practice, and calls to talk through the equipment, the structure and your timing.

Accurate details on the form, particularly the equipment price, who the borrowing entity is and how long you’ve traded, help us match the right option first time.

Match finance to my practice →