Laboratory equipment finance

How do labs finance analytical and testing equipment?

Testing labs, research facilities and diagnostics companies typically lease analytical instruments where technology and accreditation standards move quickly, and use hire purchase for durable general-purpose equipment such as centrifuges and autoclaves, which are expected to run for a decade or more. Adding a new instrument is often tied to a specific new assay or accreditation the lab wants to offer, so the equipment purchase is usually driven by a business or research need with a fairly firm timeline attached.

Buyers are testing and calibration laboratories, university and industrial research labs, and pharmaceutical or diagnostics companies, most often adding a specific new capability, such as a new assay or a new accreditation, rather than simply replacing existing equipment. Analytical instruments are expensive relative to a typical lab budget, and the timeline for adding a capability is often set by a client requirement or an accreditation deadline rather than by when the lab has accumulated enough cash to buy outright.

Leasing suits analytical instruments where technology and accreditation standards move quickly, since a lab benefits from being able to refresh equipment on a cycle that keeps pace with current standards rather than owning an instrument that becomes outdated for accreditation purposes while still working mechanically. Hire purchase suits durable general-purpose equipment such as centrifuges, autoclaves and general lab infrastructure, which is expected to run reliably for a decade or more without needing the same kind of technology-driven refresh.

Mainstream lab instruments from established manufacturers have a specialist but real secondary market, with other labs and universities as buyers for well-maintained used equipment, which gives lenders reasonable comfort with the security. Highly bespoke instruments, or equipment tied closely to a manufacturer's specific software and service agreement, have much thinner resale, and lenders will look more closely at the lab's contracts and trading history in those cases. A track record of successful accreditation renewals also counts in the lab favour when a lender is assessing the deal.

The mistake we see most often is financing an instrument over a term longer than the accreditation or calibration standard it was bought to meet is realistically likely to remain current, leaving the lab still paying for equipment that no longer satisfies the requirement it was originally purchased to meet. Checking the expected support and calibration lifespan for a specific model with the manufacturer before agreeing the term, rather than defaulting to the longest term a lender offers, is a simple way to avoid that mismatch.

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