What sets the rate a doctor or dentist is offered on equipment finance or a practice loan, the fees outside the comparison rate, and what you can change.
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Equipment Finance Rates · Pricing Drivers · Comparison Rate
The rate on medical equipment finance is built from drivers the lender prices, not read off a rate card. Here is what moves it, which fees sit outside the comparison rate, and what a practice can change before applying.
Quick Answer
The rate a practice is offered on medical equipment finance is built from drivers the lender prices, not read off a rate card, and three of those drivers, the deposit, the term and the document level, are the borrower's to change. Profession tier, asset age, structure and trading history set the rest, and the comparison rate on a quote, where one is shown at all, leaves several fees outside it. This insight walks through each driver so you can read a quote for equipment finance or a practice loan and know which lever moved it.
Also called: medical equipment loan interest rates, dental practice loan rates. Practice loan rates price goodwill and cash flow lending; equipment finance rates price a secured asset, which is why the two are quoted differently for the same practice.
What sets the rate on medical equipment finance, and why do two practices get different rates for the same asset?
The rate on medical equipment finance is not the lender's rate card; it is a price the lender builds for one practice, one asset and one structure, which is why two dentists buying the same imaging unit in the same month can be quoted differently. The misconception runs deep because comparison sites publish ranges and lenders publish headline numbers, so a practice owner reads the headline and assumes the gap between it and the offer is a mark-up. It is not. The gap is the sum of the drivers below, and the useful frame is rate drivers, not rate cards.
The first driver is the profession tier. Most lenders with a health appetite place registered medical, dental and veterinary practitioners in a professional tier that prices below general small business lending, because the income is seen as durable and the default history of the sector is low. The second is asset-age pricing: a new chair, scanner or imaging unit from a known supplier, with a secondary market, carries less security risk than an older or highly specialised unit, so the lender prices the asset as well as the borrower. Term, balloon or residual, deposit and the loan to value position each shift the lender's exposure over the life of the facility. Then comes doc-level loading, the premium a lender adds when a file is assessed on low doc evidence rather than full financials. Credit and trading history, and conduct on any facilities already running, round it out.
| Driver | Moves the rate up when | Moves it down when | Who controls it |
|---|---|---|---|
| Profession and lender tier | The borrower sits outside the lender's professional tier, or the lender has no health appetite and prices the practice as a general small business. | The practitioner is registered and the lender runs a professional or health tier that recognises the income as durable. | Lender sets the tier; the practice chooses the lender. |
| Asset type and age | Older, highly specialised or software-heavy equipment with a thin resale market; private sale or unknown supplier. | New, mainstream clinical equipment from a known supplier with a visible secondary market. | Practice, through what it buys and from whom. |
| Term length | The term runs past the asset's working life, so the balance owing is likely to exceed the asset's value late in the term. | The term matches the asset's working life, typically shorter for fast-dating items, and the balance tracks the value. | Practice, within the lender's limits for the asset class. |
| Balloon or residual | A large balloon on an asset that dates quickly, leaving the lender exposed at the end of the term. | No balloon, or a modest residual on long-life equipment with a predictable end value. | Practice proposes; lender caps it by asset class. |
| Deposit and loan to value | No deposit and a loan that covers the full invoice plus delivery, installation and training. | A deposit or trade-in that lowers the loan to value position from day one. | Practice. |
| Low doc versus full doc | The file relies on an accountant's declaration or bank statements alone, so the lender adds doc-level loading. | Full financials and tax returns are lodged and support the repayments. | Practice, by what it can supply at the time. |
| Credit and trading history | A short trading history, missed payments on other facilities, or defaults and enquiries on the file. | Clean conduct on existing facilities and an established trading record. | Practice, over time. |
| Fixed versus variable | The lender prices the risk of rates moving against it over a long fixed term. | A variable rate, or a fixed term that matches a shorter asset life. | Practice chooses; lender prices each. |
The table carries no figures on purpose. Where this commonly lands is that a practice that controls four of the eight drivers (asset, term, deposit and document level) can move its own offer more than any amount of shopping between lenders, and that is the argument the rest of this insight makes. For the approval side of a dental equipment file, the dentist equipment finance approval insight covers the steps; this one stays with price.
Are practice loan rates for doctors and dentists lower than general business loan rates?
Practice loan rates for doctors and dentists are typically lower than general business loan rates for the same amount, because the professional tier prices the practitioner's income as more durable than an average small business, but the gap narrows quickly once the loan is unsecured. A business loan written for a practice still has to be priced for what sits behind it, and that is where the two kinds of practice lending separate.
Why does goodwill lending price above a chattel mortgage?
Goodwill lending prices above a chattel mortgage because the lender's security is the practice's future income rather than a physical asset it can recover and sell. When a dentist buys an existing practice, the price is mostly goodwill, the patient base and the earning record, and a lender funding it is lending against cash flow. A chattel mortgage over a treatment centre, by contrast, is secured on the unit itself, so the lender's loss if things go wrong is capped by the resale value. The same practice can therefore hold a sharper rate on its equipment facility than on its practice loan, and that is not a sign that one lender is better than the other.
The professional tier itself varies by lender. Some banks run a dedicated health division that treats medical and dental borrowers as a defined segment; some non-bank lenders match that with a professional category; others have no tier at all and price the practice as any other trading business. The business loans for doctors insight covers how the bank health divisions read a medical file and why a practice loan and an equipment facility are often written separately, and the practice finance guide sets out the full product map for medical, dental and vet owners.
Do bank health divisions, non-bank lenders and specialist financiers price the same practice differently?
Bank health divisions, non-bank lenders and specialist medical financiers do price the same practice differently, by type rather than by name, because each funds itself differently and reads risk through a different lens. A bank health division usually offers the sharpest rate to a practice with full financials, a long trading history and a willingness to move its transaction banking across, and the price rises steeply, or the file is declined, once any of those is missing. A non-bank lender funds from wholesale lines and investors rather than deposits, so its base cost is typically higher, but it prices low doc files, short histories and unusual structures that a bank will not, and its doc-level loading is often smaller than the bank's refusal. Specialist medical and dental financiers sit between the two, with asset-class knowledge that lets them price older or specialised equipment more confidently than a generalist.
The shift toward non-bank lending is now large enough that a practice comparing quotes should expect to see all three types in the mix. The figures below are market-wide rather than medical-specific, and they explain why the second and third quotes on a practice file now routinely come from outside the banks.
| Measure | Figure | As at |
|---|---|---|
| SMEs that sourced non-bank lending in the past 12 months | 34 per cent | June 2026 |
| SMEs that have used or would consider a non-bank lender | 92 per cent | June 2026 |
| Non-bank lenders' share of Australian financial system assets | 6 per cent | March 2026 |
Sources: East and Partners, SME Growth Index release, 9 June 2026. Reserve Bank of Australia, Financial Stability Review, March 2026, published 19 March 2026. Both read 22 October 2026.
What the table says for a practice is that the non-bank share of borrowers is far larger than the non-bank share of system assets, which is another way of saying non-bank lenders write many smaller facilities, and equipment finance for a clinic is exactly that kind of facility. The medical finance companies insight explains who the provider types are, and the bank to non-bank refinance insight covers what changes when a practice moves between them.
Why does an equipment finance quote often show no comparison rate, and which fees sit outside it?
An equipment finance quote often shows no comparison rate because the comparison rate is a consumer credit requirement, and a chattel mortgage or practice loan written to a business for a business purpose sits outside that regime. MoneySmart defines a comparison rate as a single rate that combines the interest rate with most of the fees and charges, so that two consumer loans can be compared on one number; on a business facility the lender is not required to calculate it, and many do not. That leaves the practice owner to do the job the comparison rate would have done, which means knowing which fees outside the comparison rate a business quote can carry even where one is shown.
- Establishment fee. A one-off charge for setting up the facility, sometimes called an application or approval fee. It is usually capitalised into the loan, so it attracts interest for the whole term.
- Documentation fee. A separate charge for preparing the contract and registering the lender's security interest; some lenders fold it into the establishment fee, others itemise it.
- Account keeping fee. A monthly or annual charge that a comparison rate would include on a consumer loan but which is easy to miss on a business quote presented as a single rate and repayment.
- Early termination fee. A charge for paying the facility out before the end of the term, separate from any break cost on a fixed rate; the two are often confused and both can apply.
- Brokerage. Where a broker arranges the facility, the lender typically pays a commission that is built into the rate; it is disclosed, but it is not a separate line a comparison rate would isolate.
A balloon changes the comparison as well. Two quotes at the same rate are not the same price if one carries a balloon payment and the other does not, because the balloon lowers the monthly repayment while raising the total interest paid, and it leaves a lump sum to refinance or clear at the end. The comparison rate insight works through the mechanics on car and business finance, and the asset finance for doctors insight answers the residual question for a medical file, so neither is repeated here. The practical test is simple: ask every lender for the total amount repayable over the term including fees and any balloon, and compare that figure rather than the rate.
What are break costs on a fixed chattel mortgage, and when does refinancing to a lower rate pay?
Break costs on a fixed chattel mortgage are the lender's charge for ending a fixed rate contract early, calculated on the interest the lender locked in for the remaining term and what it can now earn on that money instead, so the charge is highest early in the term and when market rates have fallen since the contract was written. Most medical equipment finance is written at a fixed rate, which makes the repayment predictable but creates a break cost exposure the moment a practice wants to refinance, upgrade the equipment or pay the facility out from a practice sale. A variable rate facility usually carries no break cost but can still carry an early termination fee, which is the distinction the previous section drew.
Refinancing to a lower rate pays when the interest saved over the months left clears the break cost plus the new lender's fees, and the only way to know is the payout figure check:
- Request the payout figure. Ask the current lender for a written payout figure as at a date, which includes the balance, any break cost and any early termination fee.
- Price the new facility in full. Add the new lender's establishment and documentation fees to the amount being refinanced, and note whether a balloon is being moved or cleared.
- Compare total cost to term end. Set the remaining repayments on the old facility against the full repayments on the new one, including the payout figure, over the same end date.
- Check what else moves. A refinance that consolidates several facilities with one lender, or that lifts a personal guarantee, can be worth doing even where the rate saving alone is marginal.
The business loan refinance insight sets out the exit costs in detail. The cash rate story, including how a change passes through to fixed and variable clinic facilities and when to fix, belongs to the clinic finance rate impact insight, and the chattel mortgage, finance lease and hire purchase structures themselves are defined in the equipment finance guide.
What can a doctor or dentist change before applying to get a better rate?
A doctor or dentist can change the rate offered before applying by moving the drivers that are the practice's to move: the deposit, the term, the document level, the number of lenders holding its facilities and the shape of the file it presents. None of these requires waiting for the market to move, and together they commonly matter more than the difference between two lenders' headline rates.
Levers the practice controls
- Deposit or trade-in that lowers the loan to value position
- A term matched to the asset's working life, not stretched past it
- Full financials lodged, so no doc-level loading applies
- Facilities consolidated with one lender rather than spread across several
- Clean conduct on every running facility for the months before applying
- A broker who can place the file in the right tier at the right lender
Levers the lender sets
- Whether it runs a professional or health tier at all
- Its own cost of funds, bank or non-bank
- Residual and balloon caps by asset class
- How it treats asset age and private sales
- Its fixed rate margin and break cost formula
- Whether it will match a competing quote
Deposit is the fastest lever. The deposit and tax insight explains why a no-deposit facility is often approvable but rarely the sharpest price, and the same logic applies to a practice fit-out, where the fit-out loan terms insight shows how deposit and security change the terms offered. Term is the second: a lender will typically price a term that matches the asset's working life more sharply than one stretched to lower the repayment, because the stretched term leaves it exposed late in the contract. Document level is the third, and it is the one practices most often leave on the table by applying before the accountant has finalised the latest year.
Rate matching does happen, but it is a lender decision, not a borrower right, and it works best when the competing quote is from the same lender type and the file is strong enough that the first lender wants to keep it. Usually, a well-presented file brings the quotes closer together before any negotiation starts, and the Whitecoat loan pack sets out what that file contains. The Whitecoat hub carries the rest of the practice finance series, and a broker who works across bank, non-bank and specialist funders can tell you which tier each would place you in before any application is lodged.
The rate on medical equipment finance or a practice loan is built from drivers, not read off a card: profession tier, asset age, term, balloon, deposit, document level, trading history and fixed or variable pricing. Goodwill lending prices above a chattel mortgage because the security is cash flow rather than an asset; bank, non-bank and specialist lenders price the same practice differently by type; a business quote often carries no comparison rate and several fees sit outside it; and a fixed facility carries break cost exposure that the payout figure check measures before any refinance.
Key takeaway: move the drivers you control, deposit, term, document level and facility consolidation, before you compare lenders, then compare total cost to term end rather than the headline rate.Frequently Asked Questions
The average interest rate on equipment financing is not a single figure, because every quote is built from drivers the lender prices for one borrower and one asset rather than from a published average. Profession and lender tier, the asset's type and age, the term, any balloon, the deposit, the document level and the practice's trading history each move the rate, so two practices buying the same unit are regularly quoted differently. Comparison sites publish indicative ranges, but the only rate that matters is the one your own file produces, and the drivers in this insight explain why.
Dental practice loan rates and medical practice loan rates are priced from the same drivers, so the difference between them is usually smaller than the difference between two practices in the same profession. Both professions typically sit in a lender's professional tier, and what then separates one offer from another is whether the loan is secured on equipment or rooms or is goodwill lending, how long the practice has traded, and how clean the financials are. In practice, a dentist with a strong file and secured lending is offered a sharper rate than a doctor with an unsecured goodwill loan and a short history, not the other way round, and the doctors business loan insight covers the medical side in detail.
Medical equipment loan interest rates do depend on the equipment, because the asset is the lender's security and its type, age and resale value set how much risk sits behind the rate. New imaging and treatment equipment from a known supplier, with a clear secondary market, is typically priced more sharply than older, specialised or software-heavy items whose value falls quickly, which is asset-age pricing in action. The structure matters too: a chattel mortgage over a long-life asset generally prices below unsecured lending for the same practice, and the deposit and tax insight explains how the deposit changes the lender's position.
Typical terms for equipment financing follow the working life of the asset rather than a fixed number of years, so a lender will usually offer a shorter term on items that date quickly and a longer term, often with a residual, on long-life clinical equipment. Terms vary by lender and by asset class, and a term that runs well past the point where the equipment is worth less than the balance owing is the one lenders push back on. Which dental assets lenders fund first and how long each is funded for is covered in the practice asset ladder insight, so this answer stays with the pricing side.
Medical equipment finance can be refinanced to a lower rate, and whether it pays depends on the break cost exposure on a fixed facility against the saving over the remaining term. The first step is the payout figure check: request the payout figure from the current lender, add the new lender's establishment and documentation fees, and compare the total with the interest saved over the months left. The business loan refinance insight walks through the exit costs, and a refinance that also consolidates several facilities with one lender often produces a bigger saving than the rate move alone.
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