Ways to Get Dental Equipment Financing

Starting a dental practice can be an expensive undertaking; paying for the location, hiring staff and advertising can add up quickly. When the price of the dental equipment is factored in, it is even more. With new technology the equipment can include costly dental chairs, x-ray equipment and other high-ticket machinery. The options are to purchase this equipment outright or use dental equipment financing. This can be done with a loan or a lease. With leasing there is usually an option of purchasing the equipment at the end as well.

Getting Started

Getting a business loan is usually the first place to start a new practice because the business expenses can add up. The loan can include all the dental equipment financing costs also. This preserves some working capital for the business to operate with. These loans are customizable, providing graduated payments or deferring the payments until later. When the loan terms have been met, the equipment will belong to the practice. A dental equipment loan will usually have a term of one to ten years.

Upgrading an Existing Practice

Older offices also need to upgrade their equipment regularly. Dental technology can change or existing machinery can begin to malfunction and break down. The costs incurred can be financed through traditional dental equipment financing methods as well. By paying for the equipment this way the equity in the practice is still accessible and no collateral is required. In general, these loans for upgraded equipment can be taken out for one to ten years.

Leasing Equipment

Leasing equipment is also a popular choice for dental practices. Leasing is used by up to one third of dental practices to get the machinery they need. Monthly payments for leased equipment are lower with the added benefit of being able to purchase the equipment without paying the full original cost. Leasing allows users to only pay for the portion of time that they use the machinery. At the end, they have the option to purchase the equipment by traditional financing methods or by paying the remaining balance in full. However, they also have the option of upgrading to a newer technology.

The Tax Benefits

There are many tax benefits available for dental equipment financing. With traditional financing, up to $250,000 of expenses can be deducted. In addition, any amount over $250,000 gets bonus depreciation. Any remaining cost is spread out over five to seven years. Leasing has tax benefits as well. In fact, it is possible to deduct a dental lease as a business operating expense. The practice can choose to use this deduction over time or as a lump sum deduction at the end of the lease plan.

Dental equipment financing allows dental practices to get the equipment needed without having to pay up-front costs that can lower capital and equity. While loans may require a down payment, the tax benefits can off-set that. Leases differ from purchasing because they require no down payment usually and are the often the perfect solution for rapidly changing dental equipment technology. Patients also get the benefit of patronizing a dental practice with state-of-the-art technology.