The short version
- Medical equipment finance is business asset finance for the equipment a practice runs on: imaging, dental chairs, surgical and diagnostic kit. The equipment itself is the security for the loan.
- The chattel mortgage is the default structure: the practice owns the equipment from day one, claims the GST on the next BAS, and depreciates it under Division 40. Operating leases suit fast-obsolescing technology the practice wants to refresh every few years.
- Rates for established practices generally sit around 6-10% p.a. Registered medical and dental practitioners are treated as low-risk borrowers, so deposits are often nil and pricing sits at the sharper end of the market.
- Fit-out is a separate consideration. It depreciates under Division 43, not Division 40, and lenders fund it more cautiously because it has little resale value, though it can often be bundled with the equipment under one facility.
Medical and dental equipment is expensive and long-lived, and it is central to how a practice earns. A CBCT unit, a set of dental chairs, an ultrasound, a sterilisation suite: each is a substantial capital outlay, and how the purchase is structured changes the tax position and the cashflow more than most practice owners expect. This guide sets out what medical equipment finance actually is, the structures Australian practices use, what it costs, and where practice fit-out sits alongside it.
What medical equipment finance covers
Medical equipment finance is asset finance for the clinical and diagnostic equipment a healthcare practice uses. The equipment secures the loan, and the lender pays the supplier directly at settlement.
It sits inside the broader asset finance category, and the mechanics are the same as any other equipment purchase. What shifts is the asset class and the borrower profile. The equipment commonly financed:
- Imaging: X-ray, ultrasound, OPG and CBCT units for dental and specialist practices, and full CT or MRI for larger imaging groups.
- Dental: chairs, delivery units, CAD/CAM mills and scanners, autoclaves and sterilisation suites.
- Surgical and procedural: theatre equipment, endoscopy stacks, lasers, monitoring and anaesthetic equipment.
- Diagnostic and consulting-room: pathology and point-of-care equipment, examination and treatment-room fit-out equipment.
- Practice IT: servers, imaging storage, practice-management hardware, often refreshed on a shorter cycle than clinical equipment.
Practice fit-out (the surgery build, cabinetry, plumbing and electrical) is financeable too, but it is treated differently for both tax and lending. That sits in its own section below.
The structures a practice uses
Three structures cover almost all medical equipment finance. The choice comes down to whether the practice wants to own the equipment at the end and where it wants the GST and deductions to land.
Chattel mortgage
A chattel mortgage is the default. The practice takes ownership of the equipment at settlement, and the lender registers a security interest on the Personal Property Securities Register (PPSR) until the loan clears.
Because the practice owns the equipment from day one, it claims the full GST credit on the purchase in the next BAS rather than spread across the term. It depreciates the equipment under Division 40 at the ATO's published effective-life rate, and the interest portion of each repayment is deductible. For a GST-registered practice using the equipment in its business, this is almost always the cleanest structure.
Operating lease
An operating lease is a rental arrangement: the practice uses the equipment for a defined term and hands it back at the end, with no obligation to buy. The lender carries the residual risk.
That makes an operating lease more expensive than a chattel mortgage on a like-for-like basis, but it suits equipment where the technology moves fast and the practice wants to refresh every few years rather than own an ageing asset. Imaging and practice IT are the common cases. Rentals are fully deductible, and GST is paid on each payment rather than upfront. Under AASB 16 most leases now sit on the balance sheet for reporting purposes anyway, so the old off-balance-sheet appeal has narrowed. Where the real question is owning versus renting the same asset, chattel mortgage vs operating lease sets the two side by side.
Finance lease
A finance lease sits between the two: the lender owns the equipment and leases it to the practice over a fixed term with a residual payable at the end. GST is paid on each rental, and the full rental is deductible. It turns up where the cashflow profile of paying GST progressively suits the practice better than paying it upfront, but for most equipment purchases the chattel mortgage wins on tax.
What it costs
Medical equipment finance is priced off the lender's cost of funds plus a margin for the asset and the borrower. The borrower side is where practices do well.
Registered medical and dental practitioners are among the lowest-risk borrowers in commercial lending: default rates are low, incomes are stable, and professional registration is itself a strong credit signal. So established practices generally price in the 6-10% p.a. band on a chattel mortgage, often with no deposit on new equipment, and terms of one to seven years with five the common landing point. Leases sit a little higher, reflecting the residual risk the lender carries. For context, the RBA's lenders' interest rates series puts the average rate on new variable-rate small-business loans around 7% p.a.; the sharpest medical deals sit at or below that, with health-specialist lenders occasionally running promotional rates lower again. A balloon at the end is available on a chattel mortgage but less common on clinical equipment than on vehicles.
The lender mix reflects the specialisation. Bank health divisions like NAB's Medfin and BOQ Specialist compete hard for practice lending, alongside specialist medical financiers such as Credabl and the generalist asset-finance lenders. The equipment manufacturers' own finance arms also write deals directly on some imaging and dental equipment. The right lender on a given deal shifts with the equipment type, the practice's stage, and whether the borrower wants the whole banking relationship in one place.
What lenders look at
For an established practice, the assessment is light relative to most commercial lending:
- Trading history and cashflow: a practice with a couple of years of clean numbers financing new equipment is a straightforward deal.
- The principal's credentials: professional registration and specialty carry real weight; lenders price a registered dentist or specialist as low-risk.
- The equipment specification and supplier: mainstream equipment from a reputable supplier holds resale value and is easy to fund; highly specialised or imported equipment can narrow the lender list.
- Practice stage: a de novo (brand-new) practice is a different deal to an established one, and is covered in the FAQs below.
Where practice fit-out sits
Fit-out finance is a separate question, and the difference matters. Clinical equipment depreciates under Division 40 as plant. The structural fit-out (the surgery build, cabinetry, plumbing, electrical, flooring) is capital works and depreciates under Division 43 at the capital-works rate, usually 2.5% a year. Some removable items within a fit-out stay as Division 40 plant. The line between them is worth confirming with the practice accountant before signing.
For lending, fit-out is harder to fund than equipment because it has almost no resale value. A lender cannot repossess and re-sell a surgery build the way it can a dental chair. In practice, fit-out is often financed alongside the equipment under one bundled facility, with the equipment carrying the security, or funded against the practice and the principal's covenant. The asset finance desk structures the equipment and fit-out together where the deal supports it.
A note on the instant asset write-off: the $20,000 threshold that was announced as permanent from 1 July 2026 (for businesses under $10 million turnover, and not yet legislated) only applies to assets costing under $20,000. Most clinical equipment sits well above that, so the write-off is relevant to minor equipment and consumables, not to an imaging unit or a chair. Confirm the current position with the practice accountant rather than building it into the equipment cost.
A worked example
A two-chair dental practice in suburban Brisbane upgrades: a new CBCT/OPG imaging unit, two chairs with delivery units, and a sterilisation suite, totalling about $220,000 including GST. The principal is a registered dentist, and the practice has three years of clean trading.
The deal structures as a chattel mortgage over five years at an indicative 7.5% p.a., with no deposit and no balloon. The practice takes ownership at settlement and claims the full GST of about $20,000 on the next BAS. Depreciation runs under Division 40 on the equipment. Settlement clears in about a week once the supplier invoices are in. The cabinetry and surgery fit-out for the second chair, about $40,000, is bundled into the same facility against the equipment security rather than financed separately.
A larger imaging practice buying a $600,000 ultrasound and CT combination would structure differently. The imaging equipment might go on an operating lease to allow a technology refresh in four years, while the fit-out and ancillary equipment run on a chattel mortgage. The blended structure is where a broker earns its keep.
If you are planning an equipment purchase or a practice fit-out and want a broker's read on structure, lender appetite and likely pricing, the application form is below. Most enquiries get a response within four business hours.