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Asset Finance : A Comprehensive guide to Dental Owners

Updated: Dec 25, 2023

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Welcome to our in-depth guide on asset finance for dentists. If you're a dental practitioner looking to acquire essential equipment and grow your practice without the burden of upfront costs, you've come to the right place. In this comprehensive article, we'll explore the ins and outs of asset finance, how it can benefit your dental practice, and the various types of asset financing options available to you.

What is Asset Finance?

Asset finance is a financial solution designed to assist businesses, including dental practices, in acquiring essential assets, whether through purchase or lease. These assets can encompass a wide range, from general office equipment to specialized dental machinery and even furniture.

The Challenge for Dental Practices

Dental practices often require substantial investments in equipment, such as dental chairs, X-ray machines, and specialized instruments. For both startup practices and established ones facing cash flow challenges, securing these assets can be a daunting task. That's where asset finance comes into play.

Funding Your Dental Equipment

Asset financing can take different forms, depending on your needs and preferences. Here's a closer look at two common approaches:

1. Outright Purchase

In this scenario, the asset finance provider grants you the funds necessary to acquire the asset directly. You own the assets from the outset, and you repay the loan over time.

2. Lease and Loan

Alternatively, the provider may opt to purchase the asset themselves and then lease it to your dental practice. At the end of the loan term, you may have the option to acquire full ownership of the asset, or it may remain in the possession of the finance company.

Asset Finance vs. Asset-based Finance

Before delving deeper into asset finance, it's important to distinguish it from asset-based finance. While the terms sound similar, they serve different purposes.

Asset Finance

Asset finance, as previously discussed, revolves around securing funds for the acquisition of assets such as dental equipment. It is essentially a funding solution for acquiring assets.

Asset-based Finance

On the other hand, asset-based finance pertains to using assets your business already owns as collateral to secure a loan. This type of financing is often employed to address short-term cash flow issues and ensure the daily operations of your practice.

Securing a Loan Using an Asset

Asset-based finance hinges on the concept of securing a loan using one or more of your company's existing assets as collateral. Common assets used for collateral include specialized machinery, company vehicles, owned property, and accounts receivable. These assets serve as a guarantee that the lender can recover their investment in case you cannot meet the loan terms.

Common Dental Practice Assets

1. General Office Supplies: These include desks, chairs, IT equipment, and stationery.

2. Specialized Dental Equipment: Dental chairs, specialized lighting, and a wide range of instruments fall into this category.

3. Company Vehicles: Whether you need large trucks for transporting equipment or private cars for business travel, asset finance can cover these expenses.

4. Specialized Machinery: Dental practices often require high-cost machinery such as X-ray machines, scanners, and digital imaging equipment.

Categories of Assets: Hard vs. Soft

Assets eligible for financing are typically categorized as hard or soft assets:

Hard Assets

Hard assets are durable and have a significant resale value. They are commonly used as collateral in asset-based finance arrangements. Examples include heavy machinery and vehicles.

Soft Assets

Soft assets have limited resale value, making them riskier for lenders. They may require additional security or guarantees from the borrower. Examples include IT software and medical equipment that cannot be reused.

The Role of Asset Finance in Your Dental Practice

Whether you're a startup or an established dental practice, asset finance can play a pivotal role in your growth and success. Let's explore the advantages of leveraging asset finance:

1. Reduce Upfront Costs

Asset finance enables you to acquire essential equipment without the need for a substantial upfront payment. This cost-effective approach is particularly beneficial for conserving your business's capital.

2. Plan Your Financial Year

With fixed payments over a defined term, asset finance simplifies your budgeting and financial planning. You can allocate your resources more efficiently to other areas of practice growth.

3. Protect Your Capital

Even if you have the cash available to purchase an asset outright, asset finance can still be a wise choice. By retaining your capital for emergencies or other investments, you maintain financial flexibility.

4. Spread Payments

Asset finance spreads the cost of an asset over several months or years, aligning with your cash flow. This prevents the strain of a lump-sum purchase.

5. Maintenance Coverage

Maintenance and repair costs during the asset's lifespan are typically covered by the provider, offering protection against unforeseen expenses.

6. Competitive Loan Terms

Asset finance providers may offer more favorable terms than traditional lenders, including lower interest rates and flexible payment structures.

7. No Depreciation Concerns

Assets often depreciate over time, but with asset finance, any loss in value is typically borne by the lender, not your business. This is especially beneficial for high-value assets.

Exploring Different Asset Finance Options

Asset finance for dental practices encompasses several options. Let's delve into the three primary categories:

1. Hire Purchase

Hire purchase allows you to pay for the assets in installments over time. You gain ownership at the end of the term, giving you the flexibility to budget while acquiring essential equipment.

2. Finance Lease

In a finance lease, the finance company retains ownership of the asset throughout the agreement. You have the option to continue leasing or purchase the asset when the term ends.

3. Operating Lease

An operating lease typically covers a shorter term and may include maintenance and servicing. At the end of the lease, you can return the asset, renew the lease, or purchase it at its residual value.


In conclusion, asset finance is a powerful tool that can empower your dental practice to acquire essential equipment, manage your finances more efficiently, and preserve your capital. Whether you're a startup or an established practice, exploring the various asset finance options available can help you take your practice to new heights.


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