How Canadian Medical and Healthcare Clinics Can Finance Diagnostic or Lab Equipment
Canadian clinics usually finance diagnostic and lab equipment through equipment leases, sales-leaseback/refinancing of existing assets, equipment lines of credit, and—sometimes—term or unsecured loans. For most practices, a well-structured lease is the fastest, least painful way to get modern equipment without blowing up cash flow.
Let’s walk through how this works in the real Canadian market, what lenders quietly care about, and how a clinic can position itself to be approved on good terms.
Why diagnostic and lab equipment financing is a big deal for Canadian clinics
Modern diagnostic and lab equipment is expensive, specialized, and always going out of date. A single MRI system can run from the low hundreds of thousands up to well over $1 million, depending on configuration and whether it’s new or used.(Block Imaging) Private MRI/CT operators in Ontario commonly charge $700+ per scan for self-pay patients, which shows both the earning potential and the stakes if your equipment is down or obsolete.(Canmax Medical Imaging)
At the same time, Canadian investment in health and social protection infrastructure has been growing quickly—up about 25% in 2023 alone, according to Statistics Canada.(Statistics Canada) A big chunk of that spend is equipment. Meanwhile, the commercial machinery and equipment rental and leasing industry generated $17.5 billion in revenue in 2023, up 8.5% year-over-year, showing how central leasing has become to financing capital assets in Canada.(Statistics Canada)
Industry reports from the Canadian Finance and Leasing Association (CFLA) indicate that asset-based finance (leases and similar products) funded around 36% of all equipment and commercial vehicle spending in 2019—and the share remains high.(cfla-acfl.ca)
Put simply:
- You need expensive equipment to stay competitive.
- You probably can’t or shouldn’t pay cash.
- Most Canadian businesses solve this with leasing or asset-based structures, not just bank loans.
Option 1: Equipment leases for diagnostic and lab equipment
For most clinics, leasing is the primary tool for financing diagnostic and lab equipment. It spreads the cost over 3–7 years, keeps your cash free for staff and operations, and can be structured to match how your clinic earns revenue.
You can see Mehmi’s overview of equipment leasing options here: Equipment Financing – Overview.
How medical equipment leases typically work
The basics:
- A lessor like Mehmi buys the equipment from the vendor.
- Your clinic leases it back for a fixed term—often 36–84 months.
- Payments are usually monthly, sometimes seasonal if your cash flow is lumpy.
- At the end, you either return, upgrade, or buy out the equipment, depending on the lease type.
Common lease structures for clinics:
- FMV (fair market value) / operating-style lease
- Lower payments.
- You can return or upgrade at the end, or buy at fair market value.
- Good when technology changes fast—e.g., imaging, analyzers, digital radiography.
- 10% or fixed-percentage buyout
- Slightly higher payments than FMV.
- You know the final buyout (e.g., 10% of original cost).
- Useful when you expect to keep the asset past the initial term but still want flexibility.
- $1 buyout / capital-style lease
- Essentially ownership over time.
- Highest monthly payment, but you own the equipment at the end for a nominal amount.
- Better for lab automation, furniture, or assets where technology changes more slowly.
You can read more about these structures on Mehmi’s Equipment Leases page.
Why leases fit diagnostic and lab equipment so well
In a healthcare setting, leases help you:
- Match cost to revenue – You’re paying for the machine as you generate billings from tests and procedures, not years upfront.
- Upgrade more easily – When the lease ends, you can transition to the next generation of equipment instead of owning outdated hardware.
- Keep bank credit free – Leasing sits outside your main operating line of credit, so your bank borrowing base stays available for things like payroll and inventory.
- Leverage the equipment itself as security – Credit decisions rely heavily on the asset being financed, not just on broad collateral.
Canada’s asset-based finance sector is built for exactly this use case—high-value, depreciating equipment that clinics need now, without wanting long-term tech risk.(cfla-acfl.ca)
Mehmi also maintains a list of Eligible Equipment, including lab analyzers, imaging systems, sterilization equipment, dental and aesthetic devices, and more. If it’s core to patient care and has a serial number, there’s a good chance it’s financeable.
Option 2: Sales-leaseback and refinancing existing equipment
If your clinic already owns equipment outright—or paid cash in the past—you may be sitting on trapped equity. That’s where sales-leaseback structures come in.
A sales-leaseback lets you:
- Sell existing equipment to a finance provider.
- Immediately lease it back and continue using it.
- Use the cash to upgrade other equipment, renovate your space, or strengthen working capital.
Typical documentation includes original purchase invoices, proof of payment, current registration (if applicable), and a new bill of sale from your clinic to the funder, plus evidence that liens have been cleared.
In practice, this can work well when:
- You bought an analyzer or digital imaging system during COVID with cash or a short-term bank loan.
- Rates now are still relatively moderate (Bank of Canada policy rate is about 2.25% as of late 2025).(Bank of Canada)
- You’d like to recover cash to hire another technologist or expand hours.
Mehmi structures this under Refinancing or Sales Leaseback. For many clinics, it’s a way to unlock capital without compromising equipment availability.
Option 3: Equipment lines of credit and asset-based lending
If you’re constantly adding or refreshing equipment—say you’re growing a multi-location diagnostic lab or regional imaging group—individual leases start to feel like whack-a-mole.
Two structures can simplify this:
- Equipment line of credit
- Pre-approved limit specifically for equipment and fit-out.
- Draw as you need; each draw converts into a term schedule.
- Useful for planned rollouts or phased upgrades.
- See Mehmi’s Equipment Line of Credit.
- Asset-Based Lending (ABL)
- Larger facilities where financing is tied to the value of a pool of assets—equipment, sometimes receivables.
- Works well for larger healthcare groups with significant balance sheets.
- More bespoke covenants but can deliver higher limits and flexible draws.
- Learn more on Mehmi’s Asset Based Lending page.
In both cases, you’re still effectively using the equipment as primary collateral, but with more flexibility than a series of one-off leases.
Option 4: When business loans make sense for clinics
While the priority for diagnostic and lab equipment should be lease financing, there are cases where a term loan or working capital product is useful:
- You’re buying mixed assets (equipment plus leaseholds, marketing, or initial payroll).
- You want to bundle multiple smaller assets (IT, software, PCs) that might be cumbersome to lease individually.
- You’re funding short-term growth gaps—like a new contract that increases test volumes before payors reimburse.
BDC’s guidance on loan selection is clear: start by knowing why you need the money (equipment, working capital, expansion) and match the product to that need, not the other way around.
Common loan types a clinic might use
From lender and marketplace guides: term loans, lines of credit, and unsecured loans are the main tools.
- Term loan (secured or partially secured)
- Lump sum, repaid over 2–10+ years.
- Can be used for equipment, leaseholds, or consolidating short-term debt.
- Often cheaper than credit cards or merchant advances but slower and documentation-heavy.
- Working capital loan
- Supports receivables timing, inventory, or ramp-up costs.
- Typically shorter term, higher rate than a prime-based bank loan but much faster to obtain.
- See Mehmi’s Working Capital Loan.
- Business line of credit
- Revolving facility for day-to-day cash needs.
- Better for operating expenses than capital assets.
- See Mehmi’s Line of Credit.
- Unsecured business loan
- No asset pledged as collateral; lender relies on cash flow and credit profiles.
- Faster approvals and minimal paperwork; higher rates and lower limits.
- Mehmi offers both Secured and Unsecured Loan options when it’s the right fit.
In my view, it’s usually a mistake for clinics to finance big-ticket equipment with general-purpose working capital. Use leases or asset-based tools for anything with a serial number; keep loans and lines for payroll, marketing, and buffer capital.
You can browse an overview of Mehmi’s lending options here: Business Loans – Overview.
Comparing your options: leases vs loans vs sales-leaseback
Here’s a simplified side-by-side comparison for a clinic looking to finance diagnostic or lab equipment:
You can estimate payments and scenarios for your own clinic using Mehmi’s online Calculator.
What lenders actually look for in medical and healthcare clinic deals
Behind the scenes, credit teams follow structured guidelines when they underwrite medical, dental, and aesthetic clinic applications. Internal broker directives typically require a clear write-up covering:
- Activity of the company – What kind of clinic (medical, dental, aesthetic, lab), years in business, business story, permits, and capacity (treatment rooms, waiting area).
- Shareholder experience – Are owners physicians, nurses, dentists, or other health professionals with relevant track record?
- Type and location of equipment – Exactly what’s being purchased and where it will sit (clinic address, centralized lab, etc.).
- Reason for funding – Additional capacity or replacement? If additional, what’s the expected revenue increase?
- Desired term and structure – Term length, any cash down, preferred residual or buyout.
General credit directives also differentiate by deal size:
- Under $100,000: credit application, equipment specs, brief business summary, vendor details, and sometimes recent bank statements.
- Over $100,000: sector-specific credit write-up is mandatory, and deals over $250,000 typically require accountant-prepared financials and interim statements.
For weaker-credit or older assets, underwriters often ask for:
- Last 3 months of business bank statements (in proper PDF, not photo uploads),
- Personal net worth statements,
- Repair invoices, especially for high-kilometre or high-usage equipment.
The upshot for clinic owners: your story matters, but it has to be backed by numbers and documents. Mehmi’s credit team leans heavily on sector-specific knowledge so your application isn’t judged like a generic retail business. You can see the breadth of industries they work with here: Industries – Overview.
How funding actually closes: vendor invoices, insurance, and checklists
Once you’re approved, the funding package is what gets your vendor paid and your equipment released. Standard checklists usually include:
- Signed lease documents (all pages, not just first page; e-signatures must include authentication certificates).
- IDs for guarantors and signors.
- Your clinic’s void cheque or PAD form.
- Vendor invoice/bill of sale with make, model, serial, year, and tax numbers.
- Proof of any deposits you’ve paid.
- An insurance certificate listing the funder as additional insured and loss payee with 30 days’ cancellation notice.
For sales-leaseback and private sale transactions, you’ll also see requirements for:
- Original purchase invoices and proof of payment.
- Lien searches and signed waivers.
- Registration transfers into the funder’s name post-funding.
A strong broker or lender will walk your clinic and your vendor through this so the process feels more like a checklist than a scavenger hunt.
Step-by-step: preparing your clinic to finance diagnostic or lab equipment
Here’s a practical roadmap you can follow as a clinic owner or manager. It roughly aligns with bank and alternative lender guidance on preparing a “winning” financing request.
- Clarify what you’re buying and why
- Decide on the equipment model and configuration.
- Quantify benefits: more tests per day, reduced outsourcing, higher billings, or improved patient experience.
- Estimate the budget and term
- Total project cost (equipment, install, training, software, service).
- Preferred term (e.g., 72 months with 10% residual) and any cash down.
- Choose your structure
- For pure equipment: default to lease.
- If you need cash out of existing equipment: consider sales-leaseback.
- For mixed needs (fit-out, marketing, working capital): combine a lease with a working capital loan or line of credit.
- Assemble your basic documents
- Recent financial statements or tax returns (typically 2 years if available).
- Last 3 months of clinic bank statements (especially for newer or lower-score borrowers).
- Corporate summary and shareholder info.
- Copy of clinic permits and any health authority approvals (where relevant).
- Prepare a simple credit narrative
- Who you are, what services you provide, years in business.
- Owners’ professional experience (e.g., years as a practising physician, lab director, dentist).
- Why you’re buying this particular equipment and expected impact on revenue.
- Confirm vendor details and timing
- Ensure the vendor is approved with the lender.
- Confirm delivery dates, training schedule, and warranty/service contract.
- Work through the application with your finance partner
- A lender like Mehmi will structure the lease, confirm terms, and pre-clear any unique aspects (e.g., software-heavy systems, cross-border vendors).
- For more complex equipment suites, they may suggest an Equipment Line of Credit instead of multiple standalone leases.
- Close, fund, and plan the next upgrade
- Once documents and insurance are in place, funding typically follows quickly.
- Build the lease maturity dates into your longer-term capital plan so you’re ready to upgrade before equipment becomes a liability.
If you’d like a human review of your situation, you can always reach out via Mehmi’s Contact Us page.
Anonymous case study: Financing a diagnostic upgrade at a suburban imaging clinic
A group-owned imaging clinic in suburban Ontario wanted to replace an aging CT scanner and add a small in-house lab analyzer to speed up pre-procedure bloodwork.
Situation
- 7 years in operation, 3 radiologists as shareholders.
- Leasing 6,000 sq ft in a medical office building.
- Existing equipment: 1 MRI, 1 CT, ultrasound suite, PACS, and IT infrastructure.
- CT downtime was rising, and outsourcing bloodwork delayed reports by 1–2 days.
Total project:
- New CT scanner + install: $850,000
- Lab analyzer + fridge + small lab fit-out: $120,000
- IT and minor leaseholds: $80,000
- Total: $1,050,000
Constraints
- Bank line of credit already used for payroll and receivables.
- Owners didn’t want to pledge their homes again to expand the bank facility.
- They had previously paid cash for ultrasound upgrades and were feeling the strain.
Financing structure
Working with a Mehmi advisor:
- Primary equipment lease
- CT + analyzer financed under a 72-month equipment lease with a 10% residual.
- Payments structured monthly to match OHIP receivables.
- Sales-leaseback on existing MRI
- Clinic had paid down its MRI through a bank loan; it was now unencumbered.
- Mehmi bought the MRI and leased it back over 48 months, releasing $400,000 in cash.
- Working capital loan for fit-out & IT
- A 3-year working capital loan covered the $80,000 in lab fit-out and IT work plus a contingency reserve.
Outcome
- The clinic replaced its CT with minimal cash outlay and added in-house bloodwork.
- Average report turnaround time dropped, increasing referral satisfaction.
- The owners preserved their bank line for operating needs and avoided additional personal guarantees beyond what was necessary for the leases.
- With predictable lease payments and strong demand, their debt-service coverage remained healthy, even as Bank of Canada rates moved around 2–2.5%.(Bank of Canada)
This is a fairly typical Canadian solution: use leases and asset-based tools to handle big-ticket equipment, and reserve traditional loans for everything else.
FAQ: Financing diagnostic and lab equipment for Canadian clinics
1. What is the easiest way for a Canadian clinic to finance lab equipment?
For most clinics, the easiest route is an equipment lease with a specialized finance provider. Approval is largely based on the equipment, your clinic’s cash flow, and owner experience, rather than just real estate collateral. This is exactly what Mehmi does on its Equipment Leases platform.
2. Can a startup clinic with no financial statements still finance diagnostic equipment?
Yes, but lenders will lean heavily on:
- The owners’ professional experience (e.g., years practising in the field),
- A credible business plan and work contracts/referral sources, and
- Personal credit and available cash.
Internal underwriting guidelines for new medical/aesthetic clinics specifically ask for at least two years of relevant experience and a detailed description of the planned services. A startup may start with smaller ticket leases and build up.
3. Is it better to buy diagnostic equipment with a bank loan or a lease?
Generally, lease first, loan second:
- Leases keep your bank operating line free and fit naturally with equipment that becomes obsolete.
- Term loans can be great for mixed projects (fit-outs, renovations, multiple asset types) or when you’re refinancing broader clinic debt.
Many successful clinics use both: leases for machines, Working Capital Loans and Lines of Credit for day-to-day cash.
4. How much down payment do we need for a diagnostic equipment lease?
It depends on:
- Ticket size,
- Age and type of equipment,
- Credit strength, and
- Whether you’re a startup or established clinic.
Credit directives often assume a structure like 72 months / 10% cash down / 10% residual as a baseline example. Some deals go $0 down if the overall profile is strong; others may need more cash to offset risk.
5. What documents should we prepare before applying?
Most lenders will eventually ask for some version of:
- Completed application and equipment quote,
- Corporate documents,
- IDs for owners and signors,
- Recent bank statements,
- Financial statements or tax returns if available, and
- Insurance details listing the funder as loss payee.
If you’re refinancing or doing a sales-leaseback, keep original purchase invoices and proof of payment handy.
6. How do rising or falling interest rates affect equipment financing in Canada?
Most leases and loans for clinics are priced as a spread over base rates (such as cost of funds influenced by the Bank of Canada overnight rate). When the policy rate moves—currently around 2.25%—new deals may get slightly more or less expensive, but asset-based lenders tend to smooth this out over time.(Bank of Canada)
Big picture:
- Focus more on cash flow fit and flexibility than trying to time interest rates.
- If a new piece of diagnostic equipment clearly increases revenue or reduces outsourcing costs, waiting a year to maybe save 0.5% often costs more than it saves.
If you’re unsure which mix of leasing and loans makes sense for your clinic, a quick conversation with an advisor who lives in this world every day can save you months of guesswork. Mehmi’s team is reachable any time through their Contact Us page or by browsing real-world examples on the Blog and FAQ.
Internal links used
- https://www.mehmigroup.com/services/equipment-financing
- https://www.mehmigroup.com/eligible-equipment
- https://www.mehmigroup.com/services/equipment-financing/equipment-leases
- https://www.mehmigroup.com/services/equipment-financing/equipment-line-of-credit
- https://www.mehmigroup.com/services/equipment-financing/asset-based-lending
- https://www.mehmigroup.com/services/equipment-financing/refinancing-sales-leaseback
- https://www.mehmigroup.com/services/business-loans/working-capital-loan
- https://www.mehmigroup.com/services/business-loans/line-of-credit
- https://www.mehmigroup.com/services/business-loans/secured-loan
- https://www.mehmigroup.com/services/business-loans/unsecured-loan
- https://www.mehmigroup.com/services/business-loans
- https://www.mehmigroup.com/industries
- https://www.mehmigroup.com/calculator
- https://www.mehmigroup.com/contact-us
- https://www.mehmigroup.com/blog
- https://www.mehmigroup.com/faq
External citations used
- Statistics Canada – “Non-residential capital and repair expenditures, 2023” (health and social protection +24.9% in 2023).(Statistics Canada)
- Statistics Canada – “Commercial and industrial machinery and equipment rental and leasing industry generated $17.5 billion in operating revenue in 2023.”(Statistics Canada)
- Canadian Finance and Leasing Association – CMO 2020 report, asset-based finance sector financing ~36% of equipment and commercial vehicle spending in 2019.(cfla-acfl.ca)
- Block Imaging / Excedr MRI cost guides, indicating MRI systems from ~US$100k to several hundred thousand for new and used units.(Block Imaging)
- Canmax private clinic pricing – MRI, CT, and other scan prices in Ontario (e.g., MRI without contrast ~$700 + HST).(Canmax Medical Imaging)
- Bank of Canada & RBC commentary – policy rate cut to 2.25% in October 2025 and explanation of its impact.(Bank of Canada)
File-based citations used
- BDC – “How to get a business loan in Canada” (loan types, documentation, and planning).
- Swoop – “Term loans” and “Unsecured business loans” (definitions, pros/cons).
- Credit Guidelines & Funding Checklist (documentation requirements, thresholds by deal size).
- Sale & Leaseback and Private Sale funding requirements.
- Medical / Dental / Aesthetics credit write-up requirements.
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