Dental Equipment Hire Purchase
How Doulton Bridging Finance arranged £180,000 in hire purchase finance for a Surrey dental practice to acquire a CBCT scanner and digital workflow system, with same-day approval.
“The equipment paid for itself in the first eight months. Every practice within 15 miles was referring implant and ortho cases to us within weeks of installation. Asset finance was absolutely the right structure.”
The Scenario
A three-surgery private dental practice in Surrey had built a strong reputation in cosmetic and general private dentistry. The principal dentist had recently gained a postgraduate diploma in implantology and was ready to begin placing implants and treating complex orthodontic cases in-house, services that previously required referral to specialist centres and generated no revenue for the practice. The required equipment was a CBCT (cone beam computed tomography) scanner, a digital impression system, a dedicated implant surgical kit, and the associated software and PACS integration, at a total supplier cost of £180,000.
The Challenge
The practice was profitable with clean accounts but was capital-light, as the principals drew generous dividends and had reinvested in the practice's interiors rather than maintaining large cash reserves. The equipment represented more than six months of net profit and could not be funded from reserves without creating an unacceptable working capital position. An approach to the practice's existing high-street bank, which had a dental team, resulted in an offer of only £80,000 over 36 months at 9.2%, terms that were both insufficient in amount and expensive in rate. The practice manager then contacted Doulton Bridging Finance on the recommendation of a dental accountant in their network.
The Solution
Dental equipment hire purchase is a well-established specialist lending market with lenders who understand both the equipment's residual value and the income-generating potential of clinical technology. We identified three specialist dental and healthcare asset lenders and, within four hours of receiving the pro-forma invoice and basic practice financials, had two formal indicative offers. The preferred lender, a specialist healthcare asset finance provider, offered £162,000 (90% of the purchase price) at 6.4% fixed over 60 months with a £1 option-to-purchase at the end of the term. Approval was received same-day and funds cleared to the equipment supplier within three working days, enabling installation on the scheduled date. We also confirmed with the practice's accountant that the HP structure qualified the practice for the full Annual Investment Allowance, generating a first-year corporation tax saving of approximately £43,200 on the qualifying element.
The Deal Structure
| Equipment | CBCT Scanner, digital impression system, surgical kit, software |
|---|---|
| Total Equipment Cost | £180,000 |
| Deposit (10%) | £18,000 (practice funds) |
| HP Amount | £162,000 |
| Rate | 6.4% fixed for full term |
| Term | 60 months |
| Monthly Payment | £3,148 |
| Option to Purchase | £1 at end of term |
The Outcome
The scanner was operational within six weeks of finance completion, and the principal dentist began accepting implant referrals from three referring practices within the first month. By month four the practice had placed 28 implants at an average fee of £2,800, representing £78,400 of incremental revenue directly attributable to the new equipment. By month eight, monthly revenue from implantology and complex orthodontics was covering the HP payment 4.2 times over, and two neighbouring practices subsequently approached the practice about formal referral arrangements, bringing a further predictable revenue stream without additional marketing spend.