The FiSol Perspective

Dental Equipment Financing vs. Leasing: Which is Right for Your Practice?

  • October 28, 2021 by Marty Newton
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Financing vs leasing dental equipment is no small debate. The two mostly differ when it comes to actual ownership. As you know, the cost of equipment can really add up, especially if you require something specialized. Around one in five professionally active dentists, about 21%, reported that their practice, research, or administration area is an ADA-recognized specialty (per the American Dental Association). That statistic was taken in 2020, so it may be even higher by now.

So, with all these costs out there, is financing or leasing the right way to go for your dental practice? Both give you immediate access to the equipment you need, but they're structured slightly differently, so it's a good idea to investigate each option fully before deciding.

Dental Equipment Financing

Dental equipment financing is sometimes considered the simpler of the two options, but it really depends on what your business is capable of handling financially that will determine which option is better for you. Financing refers to a loan given to you by your lender that allows you the use of the equipment as long as a payment is made when required, often monthly until the full loan amount plus interest is paid off. Once you've repaid the loan, the equipment is yours.

Dental Equipment Leasing

With a lease, you do not own the equipment you're using. Instead, a lender rents it out to you for ongoing monthly payments. At the end of your lease term, you can either renew it, return the equipment, or buy the equipment. There are two main types of leases, and they differ in important ways. An operating lease has low monthly payments and offers the option to buy the equipment at the end of the lease term. A capital lease on the other hand is structured more like a loan and has higher monthly payments, but the equipment can then be bought for a nominal price.

The Bottom Line

You certainly have options when it comes to getting your hands on new dental equipment. However, it's important to keep two things in mind when considering which option will be best for your practice: how much money does your business have right now, and how quickly will the equipment you're eyeing become outdated or otherwise obsolete? If you have the money to put down and intend to keep the equipment for a long time, a loan/financing may be the best option. If not, then a lease may be the better way to go.

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