Equipment Financing for Medical Practices: Imaging, Dental Chairs and Diagnostic Equipment

Medical and dental equipment represents significant capital investment. A single digital X-ray system can cost $50,000-$150,000. A complete dental operatory runs $40,000-$80,000. Advanced imaging like CT or CBCT adds another $100,000-$400,000. Equipment financing allows practices to acquire these assets without depleting cash reserves.

This guide covers how equipment financing works for healthcare practices, what to expect from the process, and how to choose between vendor financing and independent lenders.

Common Equipment Financing Needs

Healthcare practices finance a wide range of equipment. Here are typical costs by category:

How Equipment Financing Works

Equipment financing uses the equipment itself as collateral, which simplifies approval and often results in favorable terms. The basic structure:

• Down payment — 0-20% depending on lender and credit quality
• Loan term — Typically matches useful life: 5-7 years for most equipment
• Interest rates — 6-15% depending on credit and equipment type
• Ownership — You own the equipment from day one (unlike leases)
• Collateral — The equipment secures the loan; lender can repossess if you default

Vendor Financing vs. Independent Lenders

When purchasing equipment, you typically have two financing paths:

Major dental equipment vendors (Patterson, Henry Schein, Benco) and medical equipment manufacturers often offer in-house financing. These programs can be convenient but are not always the best value. Always compare.

What Lenders Evaluate

Equipment financing approval depends on both the borrower and the equipment:

• Practice financials — Revenue, profitability, cash flow stability
• Credit profile — Owner FICO scores, credit history
• Time in business — Most lenders prefer 2+ years; some work with newer practices
• Equipment type — Standard medical/dental equipment finances easily; custom or niche items may be harder
• Equipment vendor — Established manufacturers are viewed more favorably
• New vs. used — New equipment is easier to finance; used requires current appraisal

Real-World Scenario: Dental Imaging Upgrade

The situation: A general dentist with an 8-year-old practice wants to add CBCT imaging to offer implant planning and advanced diagnostics. Equipment cost: $125,000 including installation and training.

Practice profile: $900,000 annual collections, profitable with 18% net margins, owner credit score 695, owns existing equipment free and clear.

Financing approach: Obtained quotes from the equipment vendor (Patterson) and two independent lenders.

Results: Vendor offered 8.9% over 7 years; independent healthcare lender offered 7.5% over 7 years. Practice chose independent lender, saving approximately $4,200 in interest over the loan term.

Terms: $125,000 financed at 7.5% for 84 months. No down payment required due to strong practice financials. Monthly payment: $1,920.

Used and Refurbished Equipment

Used equipment can significantly reduce costs — a 3-year-old dental chair might cost 40% less than new. Financing considerations for used equipment:

• Appraisal required — Lenders need current market value assessment
• Shorter terms — Loan term cannot exceed remaining useful life
• Higher rates — Some lenders charge premium for used equipment risk
• Limited sources — Not all equipment lenders finance used items
• Warranty considerations — Factor in potential repair costs without manufacturer warranty

Major Imaging Equipment: Special Considerations

High-cost imaging equipment (CT, MRI, CBCT above $150,000) involves additional factors:

• Site preparation — Electrical, HVAC, shielding, and structural requirements add costs
• Installation timeline — May take weeks; plan for practice disruption
• Training requirements — Staff training and certification time
• Service contracts — $10,000-$30,000 annually for major imaging equipment
• Utilization projections — Can you generate enough imaging volume to justify the investment?

For very expensive imaging, some practices partner with imaging centers or hospital systems rather than owning equipment directly. Consider the volume you will actually generate before committing to ownership.

Building an Equipment Package

When outfitting a new practice or expanding significantly, packaging multiple equipment items into a single loan can simplify financing:

• Single application — One credit pull, one approval process
• Combined terms — Weighted average based on equipment mix
• Easier management — One monthly payment instead of multiple
• Potential rate improvement — Larger loan amounts may qualify for better rates

Work with your equipment vendors to coordinate timing so items can be financed together. This is particularly useful for new practice startups or adding multiple operatories.

Tax Considerations

Equipment financing offers potential tax advantages:

• Section 179 deduction — Potentially deduct full equipment cost in year of purchase (up to annual limits)
• Bonus depreciation — Additional first-year depreciation options
• Interest deductibility — Loan interest is generally a business expense
• Consult your CPA — Tax implications vary by practice structure and total deductions

Choosing the Right Financing Path

Summary recommendations based on your situation:

• New practice or major build-out — Package equipment into SBA loan for best rates and working capital inclusion
• Single major item ($50,000+) — Compare vendor vs. independent lender rates; negotiate
• Smaller equipment ($10,000-$50,000) — Equipment financing or vendor programs; simpler process justifies convenience
• Used equipment — Specialist lenders who understand resale values
• Technology/software — Some equipment lenders include; may need term loan for software-heavy purchases

Equipment financing is generally straightforward for established healthcare practices. The equipment collateral reduces lender risk, resulting in accessible financing even for significant purchases.