Medical practices need equipment to operate. Financing that equipment means you can install what you need now and pay for it over time while it generates revenue.
What medical equipment can you finance?
Most clinical and diagnostic equipment qualifies for asset finance, including imaging machines, ultrasound systems, dental chairs, surgical instruments, sterilisation equipment, and practice fitouts. Lenders typically fund equipment that has a clear resale value and a useful life that matches the loan term. Office systems like computers and practice management software can be included if they're part of a larger equipment purchase.
Consider a dental practice upgrading to a CBCT scanner. The scanner costs $95,000, and the practice needs it operational within six weeks. A chattel mortgage lets the practice claim depreciation and GST input credits immediately while spreading payments across five years. Monthly repayments sit around $1,800, which the practice covers through the additional imaging services the scanner makes possible.
Chattel mortgage or equipment lease?
A chattel mortgage gives you ownership from day one. You claim depreciation, pay GST upfront (and claim it back if registered), and the equipment appears as an asset on your balance sheet. Fixed monthly repayments make budgeting straightforward, and you can add a balloon payment to lower those repayments if cashflow is tighter early on.
An equipment lease keeps the equipment off your balance sheet. The lender owns it during the lease term, and you make regular payments that are often fully tax-deductible as operating expenses. At the end of the lease, you can purchase the equipment for a residual amount, upgrade to newer technology, or refinance the residual. Leases suit practices that want to preserve capital or upgrade equipment frequently without carrying depreciated assets.
How lenders assess medical equipment applications
Lenders look at your practice's operating history, current revenue, and whether the equipment will directly support income generation. Most want to see at least 12 months of trading, though some will consider newer practices if you're an established practitioner moving into your own rooms. The equipment itself acts as security, so lenders also assess its resale value and condition if you're buying used equipment.
If your practice is purchasing a $150,000 MRI-compatible anaesthesia system, the lender will want to see that your practice has the patient volume and specialist relationships to justify the expense. They'll review your financials, check your credit profile, and confirm the equipment supplier is reputable. Approval can take between 48 hours and a week depending on the loan amount and how complete your application is.
Structuring repayments around your cashflow
You can structure equipment finance to match how your practice generates income. Fixed monthly repayments are standard, but you can add a balloon payment if you want lower monthly commitments and plan to either refinance or sell the equipment before the loan ends. Some lenders offer seasonal payment structures if your practice has predictable revenue variations, though this is less common in healthcare than in industries like agriculture or hospitality.
A physiotherapy clinic buying $60,000 in rehabilitation equipment might use a chattel mortgage with a 30% balloon payment over four years. Monthly repayments drop from around $1,400 to $1,050, which matters when the clinic is still building patient numbers. At the end of the term, the clinic refinances the balloon or trades in the equipment as part of an upgrade.
Tax treatment and depreciation
Medical equipment is depreciable, and how you structure the finance affects what you can claim. With a chattel mortgage, you own the equipment and claim depreciation according to the ATO's effective life guidelines. Most medical equipment depreciates over five to ten years depending on the category. You also claim the interest component of your repayments as a business expense.
Under an equipment lease, you typically can't claim depreciation because you don't own the asset, but the lease payments themselves are often fully deductible as an operating expense. The total tax benefit depends on your practice's structure, revenue, and how the equipment is used. Work with your accountant to model both options before committing, especially for high-value items like imaging or surgical systems.
Timing your equipment purchase
Medical equipment often has long lead times, particularly for imported or customised systems. Start the finance process before you place the order, not after the equipment arrives. Most lenders can issue conditional approval and then settle once the supplier confirms delivery. This avoids tying up working capital or delaying installation while you wait for funding.
If you're purchasing from an overseas supplier, confirm who handles freight, insurance, and customs clearance. Some lenders will finance the total landed cost, while others only fund the equipment itself and expect you to cover ancillary costs separately. Vendor finance or dealer finance might be available through the supplier, but rates and terms vary, so compare those offers against what you can access through a broker who works across multiple lenders.
Upgrading existing equipment
Practices often refinance or trade in existing equipment when upgrading. If you still owe money on current equipment, the new lender can roll that balance into the new loan, or you can sell the equipment and use the proceeds to clear the debt. The approach depends on the equipment's current value, how much you owe, and whether the new lender is comfortable with the combined loan amount.
If your practice wants to move from a standard X-ray system to a digital radiography setup, and you still owe $20,000 on the existing system, you can either pay out that loan before refinancing or ask the new lender to include it in the new facility. Some lenders will do this if the total amount still aligns with your revenue and the new equipment justifies the increase.
Call one of our team or book an appointment at a time that works for you. We'll review your equipment needs, compare finance structures across multiple lenders, and arrange funding that fits how your practice operates.
Frequently Asked Questions
Can I finance used medical equipment?
Most lenders will finance used equipment if it's under ten years old and has a clear service history. The loan amount is typically based on a valuation or invoice, and the equipment must have enough useful life left to cover the loan term.
What deposit do I need for medical equipment finance?
Many lenders offer 100% finance for medical equipment, meaning no deposit is required. Some may ask for a deposit if your practice is newer or the equipment is highly specialised with limited resale value.
How long does approval take?
Approval typically takes 48 hours to one week depending on the loan amount and completeness of your application. Larger loans or complex equipment purchases may take longer if additional valuations or supplier checks are needed.
Can I claim GST on financed medical equipment?
If your practice is registered for GST and you use a chattel mortgage, you can claim the GST as an input credit in the quarter you settle. Under a lease, GST is usually included in each payment and claimed progressively.
What happens at the end of an equipment lease?
At the end of a lease, you can purchase the equipment by paying the residual value, upgrade to newer equipment and start a new lease, or return the equipment and walk away. Most practices either buy out or upgrade depending on the equipment's condition and their current needs.
