Equipment Financing When Buying a Dental Practice
Equipment financing addresses the substantial investment required for dental technology when acquiring a practice. From digital radiography to chairs and sterilization equipment, proper financing preserves working capital while ensuring modern capabilities.
Equipment Financing Options
Equipment Loans
- Term: 3-7 years matching equipment life
- Rate: 7-12%
- Down Payment: 0-10%
- Collateral: Equipment itself
Equipment Leasing
- Operating Lease: $1 buyout or fair market value
- Finance Lease: Full payout, you own at end
- Rate: Implicit 6-10%
- Advantage: Preserve credit lines
SBA 504 for Equipment
- Best For: Equipment + real estate
- Rate: Fixed ~6%
- Term: 10-25 years
- Down Payment: 10%
Typical Equipment Costs
| Equipment | Cost Range | Life |
|---|---|---|
| Digital Pan/Ceph | $30K-$80K | 7-10 years |
| CBCT System | $80K-$150K | 10 years |
| CAD/CAM System | $100K-$150K | 7 years |
| Dental Chair/Unit | $15K-$35K | 15 years |
| Practice Software | $15K-$40K | 5 years |
Lease vs. Buy Analysis
Leasing Advantages
- Lower monthly payments
- Upgrade flexibility
- Off-balance sheet (operating)
- Preserves bank credit
Buying Advantages
- Section 179 deduction (up to $1.16M)
- Depreciation benefits
- No usage restrictions
- Asset ownership
Tax Considerations
- Section 179: Immediate expense up to $1.16M (2024)
- Bonus Depreciation: 60% first year (phasing down)
- Lease Payments: Fully deductible
- Loan Interest: Deductible business expense
Conclusion
Equipment financing decisions impact cash flow, taxes, and technology capabilities. Match financing method to equipment life, tax situation, and growth plans.
Need equipment financing guidance? Contact DentalBridge for lender referrals.