The short answer
Medical and health practice finance covers the needs of GP clinics, dental and specialist practices, allied health, imaging and veterinary businesses. The most common needs are equipment such as dental chairs, imaging machines, ultrasound and practice technology, fit-outs for a new or expanded clinic, buying into or buying out a practice, and buying the practice premises. Lenders generally see registered health professionals as lower risk, because income is steady and qualifications are hard to replace, and some offer specialist health lending with higher lending limits or reduced deposits for qualified practitioners. Equipment is financed against the asset, often over five to seven years. Fit-outs and goodwill are assessed on the practice's track record and the practitioner's income. Lenders check professional registration, the practice's billing mix and the premises lease. Health practices also face specific tax and payroll questions, such as how contractor arrangements are treated for payroll tax, so get advice early. FundFox arranges business-purpose finance for practices across Australia.
What do health practices usually need finance for?
| Need | Common solution |
|---|---|
| Dental chairs, imaging, ultrasound and surgical equipment | Equipment finance, often a chattel mortgage |
| A new clinic fit-out or expansion | Fit-out finance through health lenders or a property-backed loan |
| Buying into or buying out a practice | Business acquisition finance |
| Buying the clinic premises | Commercial property finance |
| Cash flow between claims and settlements | Line of credit |
| An unexpected tax or payroll bill | ATO debt funding or a short-term facility |
Why do lenders like health practices?
Registered practitioners have qualifications that are hard to replace and demand that tends to hold up through economic cycles. Many lenders therefore offer health professionals more generous terms than other businesses, such as higher limits for equipment and fit-outs or lower deposits on practice purchases. Eligibility usually depends on the practitioner's registration and type of practice, and terms differ between lenders.
Financing medical and dental equipment
Most clinical equipment is financed through a chattel mortgage or finance lease. Two things to check: technology dates quickly, so match the term to how long you'll realistically use it, and GST on medical supplies can differ from standard rules, because many health services are GST-free. A practice that makes mainly GST-free supplies can still generally claim GST credits on business purchases if it's registered, but your accountant should confirm the position.
Buying into or buying out a practice
Practice purchases are assessed on the practice's financials, the billing mix, patient base, staff and how dependent the practice is on the outgoing owner. Lenders want to see a transition plan and a lease that outlasts the loan. Buying into a partnership or associateship structure needs legal and accounting advice on what you're actually buying, such as a share of goodwill, a service entity or equipment.
Payroll tax and contractor arrangements
State revenue offices have looked closely at how some medical centres engage contractor practitioners, and several practices have faced unexpected payroll tax assessments. If a large state tax bill arrives, it can be funded like other business debts, but get specialist tax advice first on the liability itself.
What do lenders look at for health practices?
- Professional registration and years in practice.
- Practice financials and the practitioner's own income.
- Billing mix and how income is received.
- The lease for the clinic premises.
- Existing commitments, including any previous practice loans.
Example scenario
A dentist buying into a two-chair practice also wants to add a third surgery. The broker arranges acquisition finance for the goodwill share through a lender with a health professional program, and a separate chattel mortgage for the new chair, X-ray unit and sterilisation equipment, with the third surgery fit-out added to the same lender's facility.
Example only. It isn't a real client.
