Healthcare equipment finance

How do medical and dental practices finance equipment?

GP and dental practices, clinics and care homes typically use hire purchase for durable clinical equipment such as dental chairs and imaging machines, which are expected to run for many years, and leasing for equipment with a shorter clinical or technology life, such as some diagnostic and aesthetics devices. A new piece of equipment is usually tied to a specific clinical service the practice is adding, so the fees it generates from day one help justify financing rather than depleting the practice's own cash reserves.

Buyers are GP and dental practices, physiotherapy and aesthetics clinics, care homes, opticians and pharmacies, most often adding a specific new clinical service rather than simply replacing like for like. A new imaging machine, dental chair or treatment device typically starts generating fees for the practice as soon as it is in use, which makes financing attractive because it lets the practice add capability without depleting the cash it needs for premises costs and staffing.

Hire purchase suits durable clinical equipment such as dental chairs, imaging machines and general treatment equipment, which practices expect to run for many years and want to own outright once paid off. Leasing is a better fit for equipment with a shorter useful clinical life or a faster technology refresh cycle, which includes some diagnostic devices and much of the equipment used in aesthetics clinics, where new techniques and devices come to market often enough that owning outright can leave a clinic behind newer competitors.

Mainstream clinical equipment from established manufacturers has a reasonable used market among other practices, particularly dental chairs and general diagnostic equipment, which gives lenders comfortable security. Highly specialised or software-locked devices, where ongoing use depends on a manufacturer's service or licensing agreement, have much thinner resale, and lenders are more cautious financing this kind of equipment on its own security. The patient list of a practice and its history of steady, repeat income are often considered alongside the equipment when a lender assesses this kind of deal.

The mistake we see most often is treating the equipment cost as the whole cost, when installation, calibration and any regulatory compliance work needed, such as meeting CQC requirements for a new treatment room, are separate costs that a lender may or may not be willing to fund alongside the machine itself. Confirming what the finance actually covers before ordering avoids an unplanned gap in the budget. Asking the equipment supplier and installer for one combined quote, rather than separate figures, makes this considerably easier to check upfront.

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