Medical Equipment Finance 2025: Deposits, Tax Deductions & Leasing Rules
Medical equipment finance for Australian doctors and clinics – Switchboard Finance
Most clinics know they need better equipment — new scanners, chairs or imaging gear — but the questions are always the same: how much deposit will the lender want, what’s actually deductible and should we lease or buy?
The good news is that medical practices are a preferred client profile for many lenders, especially when you structure your upgrades under a clear Asset Finance strategy instead of ad-hoc purchases. The rule of thumb in 2025 is simple: line up deposit, tax treatment and device life, and the numbers usually work.
This guide walks through the three main ways to finance medical equipment, how deposits and terms change across each option, and what clinic owners should look at before saying yes to any quote from a bank or supplier. We’ll also link you to deeper whitecoat guides and show when it makes sense to speak to a specialist rather than going direct to a lender or vendor.
In practice, most clinics end up using one of three structures for equipment: a classic loan secured by the device, a lease-style product tied to its lifecycle, or a short-term working capital facility as a bridge. Each has its place — but they behave very differently on your cash flow and tax return.
The table below compares the three paths at a glance so you can see where your clinic sits today, and which option fits your next upgrade best.
| Option | When it suits | Key advantages | Watch-outs |
|---|---|---|---|
| 1. Secured equipment loans via specialist lenders | High-value devices with a long useful life (imaging, treatment chairs, core diagnostics) where the clinic ultimately wants to own the asset. | Approvals can often sit under low doc policy for established practices, with predictable repayments and clear ownership at the end. This is the benchmark structure we discuss in our Medical Equipment Finance vs Leasing guide. | If the term runs longer than the realistic clinical life, you can end up still paying off equipment that feels old. Deposits and balloons need to be sized sensibly against revenue and future upgrade plans. |
| 2. Lease-style products tied to usage and lifecycle | Technology that dates quickly, or situations where you prefer a rental-style structure and plan to upgrade regularly rather than hold the asset for ten years. | Leases can simplify the profit and loss because repayments often show as an operating cost, and they can align neatly with refresh cycles. Many clinics pair leases with a separate facility from their Whitecoat Growth Pack for consumables and minor peripherals. | Vendor leases can be restrictive if you want to change suppliers. End-of-term conditions and upgrade options need to be checked carefully so you’re not forced into another expensive cycle. |
| 3. Short-term cashflow facilities while the new service ramps | Clinics testing a new service line or adding cosmetic equipment where income is uncertain in the first 6–12 months and flexibility matters more than the absolute cheapest rate. | The cost can be temporarily parked under a cashflow facility like Working Capital Loans or a Business Line of Credit, then refinanced onto dedicated equipment finance once income is proven, often via a tailored Equipment Finance facility. | These facilities are not designed as long-term equipment funding. If you leave the device on a short-term product for too long, repayments can chew through cash flow and limit room for other upgrades or fitout work. |
A GP clinic in Melbourne wanted to add a new ultrasound machine and minor fitout changes. Instead of taking the vendor lease on the spot, they used an equipment facility structured through Equipment Finance for the device and a small working capital top-up for the fitout. The repayments were matched to realistic scan volumes, not just “best case” projections.
Deposit expectations in 2025 depend on the strength of your clinic, the asset type and whether you’re going low doc or full doc. Medical professionals are generally seen as lower risk, which often means more flexible deposit options than other industries.
For established practices with solid trading history, some lenders will offer true low doc approvals at or near 100% of the equipment cost, especially when there’s strong device resale value. Newer clinics or high-ticket cosmetic gear may trigger requests for a 10–20% deposit or additional security.
Think of the deposit as a dial that trades off against documentation and rate. A larger deposit can help you secure sharper pricing or stay under low doc policy when your financials are mid-cycle. Our deeper article on ATO asset write-off rules for medical clinics shows how some practices use tax planning to “fund” part of that deposit, alongside guidance from resources at the ATO.
- Well-established clinic + core diagnostic device → often $0–10% deposit under low doc.
- Growing cosmetic clinic + new technology → more likely 10–20% deposit and tighter terms.
- New practice with limited history → expect more scrutiny and potentially staged funding.
The key is to model repayments and deposit together. A smaller deposit can be attractive upfront, but if it pushes repayments beyond your realistic patient volume for the first 6–12 months, the stress will show up in your day-to-day cashflow very quickly.
A multi-chair dental practice wanted a CBCT scanner and considered stretching for a near 0% deposit. After running the numbers with us, they opted for a 15% deposit funded partly via their Business Loans facility and retained a small Invoice Finance limit for slower health fund payments. The combined approach kept monthly stress low while still getting the device in quickly.
Many doctors focus on headline interest rates without looking at how the structure flows through their tax and profit and loss. The same device can behave very differently across loan vs lease vs short-term facility, even when repayments feel similar.
Equipment loans typically allow you to claim depreciation and interest, and they often give you the ability to claim back GST on the purchase if your entity is registered. Lease structures change the pattern — you usually claim the lease rental as an operating cost, which can be cleaner for some practices but might reduce flexibility at upgrade time.
Timing matters too. A device financed just before year-end will hit your cashflow immediately, but the deduction might be spread over several years. That’s why our whitecoat clients often pair equipment upgrades with a broader plan using the Whitecoat Hub and the Clinic Cashflow Safety Net article as a playbook.
- Map the total out-of-pocket cost over the full term, not just the first year.
- Check how repayments line up with Medicare, private billing and cosmetic revenue cycles.
- Confirm with your accountant which mix of depreciation, interest and rental deductions fits your entity structure.
A specialist clinic planned a major imaging upgrade in June but pushed the settlement into July after reviewing their tax position and cash buffer. Using our Medical Fitout Finance guide, they staged both device and room works over two facilities so the tax profile and repayment timing matched their new service ramp-up.
The fastest way to regret any piece of finance is to mismatch the term to the real life of the equipment. A seven-year facility on a device that is commercially “old” in four years will feel cheap at the start and painful towards the end.
Start by mapping the realistic clinical life of each device, not just the warranty period. High-end imaging may justify longer terms; software-heavy cosmetic gear and lasers might not. Then align your capital plan to broader clinic strategy — are you expanding rooms, adding new modalities or simply replacing old kit?
Many practices treat equipment as pure CAPEX, but in reality it also drives marketing, staffing and space decisions. That’s why we often combine device funding with broader planning guides like Top 10 Medical Devices Clinics Finance First and How Doctors Use Low Doc Loans to Expand a Clinic.
A cosmetic clinic had layered multiple three-year vendor leases that all ended within a six-month window. Instead of rolling everything again at higher repayments, they refinanced to a staggered schedule under Low Doc Asset Finance. That spread the renewal risk and freed up headroom for a new aesthetic device guided by our cosmetic equipment finance playbook.
Rather than treating each new device as a one-off emergency decision, the strongest clinics work from a simple three-year equipment plan. It doesn’t have to be perfect — it just needs to map likely upgrades, service launches and room changes.
Start by listing your current equipment, approximate age and importance to revenue, then mark what you’ll need to replace or add in the next one, three and five years. From there, we can help match the right mix of loans, leases and cashflow facilities, backed by your broader strategy in the Business Owners Finance Hub.
Many whitecoat clients use a simple rhythm: one major upgrade per year funded via equipment finance, smaller items through the whitecoat playbook, and ongoing operating costs supported by a small, well-managed working capital or line of credit limit. That keeps control with the clinic, not with whatever vendor is standing in the showroom.
- Identify “must have” vs “nice to have” devices over the next three years.
- Decide which items suit loans, leases or cashflow facilities.
- Schedule an annual finance review alongside your accountant meeting.
A suburban medical group mapped a three-year plan: year one imaging upgrade, year two cosmetic add-on, year three second site fitout. Using our Whitecoat Growth Pack framework, they split funding across dedicated equipment facilities, a modest Invoice Finance line and a small Working Capital Loan to smooth seasonal dips, rather than leaning on one oversize facility.
For many clinics, the device itself is sufficient security under an equipment loan structure, especially when it sits under a well-designed Chattel Mortgage facility. Strong trading history, clean conduct and a realistic loan amount relative to income all help minimise the need for additional property support.
A Finance Lease can suit devices with a shorter technological life or where you want a clear rental-style structure on the profit and loss. It may also be useful when you plan to upgrade at the end of the term rather than own the device outright for ten years.
An Operating Lease usually behaves more like a rental, where you return or upgrade the equipment at the end rather than automatically owning it. Clinics often prefer this for rapidly evolving technology or equipment that needs frequent replacement to keep their brand and patient experience current.
Yes, some lenders will allow a Balloon Payment on medical equipment loans, but it needs to be sized carefully. If the residual chunk is too high relative to the real resale value of the device, you may end up refinancing or paying out more than the equipment is actually worth at the end.
Lenders look at expected useful life, secondary market demand and the pace of technology change when setting any Residual Value. Devices with strong resale demand and slower obsolescence usually support higher residuals than niche or fast-moving equipment.
