Medical, dental and veterinary equipment finance the latest kit, paid for over time

What is medical and dental equipment finance?

Medical and dental equipment finance lets a practice or clinic use new clinical and diagnostic equipment straight away and pay for it in fixed monthly instalments. It is usually arranged as a lease or hire purchase, with the equipment as security, and can often include installation, software and training.

Clinical equipment is expensive and moves on quickly. Imaging, scanners and lasers can be upgraded every few years as technology and patient expectations change, so tying up savings in a single purchase isn't always the best use of a practice's cash. Finance spreads the cost over the period the equipment is earning, whether that is from private treatment plans, NHS work, insurance-funded care or pet owners.

Lenders tend to view established practices positively because healthcare income is often regular, but they will still look at your accounts, the practice's track record and the equipment itself. As a broker, we are not tied to one lender, and we compare lenders on our panel that understand healthcare, including some that specialise in dental and veterinary kit.

Equipment is often just one part of a practice's plans. For buying a practice, premises or a full refurbishment, see our healthcare finance page, which covers the wider options.

Key features

What practices fund with it

• Dental chairs, delivery units and surgery cabinetry
• CBCT, OPG and intraoral X-ray systems
• Intraoral scanners, CAD/CAM milling and 3D printers
• Ultrasound, endoscopy and patient monitoring
• Veterinary X-ray, anaesthesia and lab analysers
• Optometry OCT, physio and decontamination equipment

Lease vs hire purchase for clinical equipment

Why VAT matters more for healthcare practices

HMRC's VAT Notice 701/57 explains that health services provided by registered health professionals, such as doctors, dentists and opticians, are exempt from VAT where their primary purpose is protecting, maintaining or restoring health. A practice making mainly exempt supplies usually cannot recover the VAT it pays on equipment used for that exempt work, and where equipment is used for both taxable and exempt services, HMRC says only the portion relating to taxable supplies can normally be recovered.

That makes the shape of the finance important. On hire purchase, VAT is usually due upfront on the full price, and if you can't reclaim it, that is a real cash cost on day one. On a lease, VAT is charged on each rental, which spreads it across the term. The VAT position for veterinary practices and clinics offering cosmetic treatment can be different, so please speak to your accountant before choosing.

Capital allowances

If you buy equipment, including on hire purchase, GOV.UK explains you can generally claim the Annual Investment Allowance, currently £1 million a year, once the equipment is in use, though not on the interest. Practices run as companies may also be able to claim full expensing on qualifying new and unused equipment. If you lease, you don't own the kit, so you generally can't claim allowances. Your accountant can confirm the best route.

What lenders typically look at

• Supplier quote including installation, software and training
• Business bank statements, typically the last three to six months
• Latest practice accounts, plus management accounts if available
• Details of NHS contracts, private plans or insurer income where relevant
• Your regulator and registration details, such as CQC, GDC or RCVS, where they apply
• Principal, partner or director details for identity and credit checks