See how Canadian clinics and dental practices can finance new medical equipment using leases, lines of credit, and loans—without crushing cash flow.
Small clinics and dental practices in Canada usually finance new medical equipment through equipment leases, sales-leaseback/refinancing, equipment lines of credit, and—sometimes—term or unsecured business loans. For most owners, a lease structured around cash flow is the cleanest way to get modern equipment without draining working capital.
Below, we’ll walk through each option in plain language, the pros and cons for a typical clinic or dental office, and how lenders actually look at these deals behind the scenes.
Small medical clinics and dental practices are capital-intensive but cash-flow sensitive. You need the same core technology as the big players—chairs, digital X-ray, CBCT, sterilizers, treatment lights, autoclaves, ultrasound, EMR hardware—but you don’t have their balance sheet.
A few realities in Canada:
At the same time, Canada’s asset-based financing and leasing sector helps finance around a quarter of new machinery and equipment investment, with roughly 60% of customers being small and medium-sized businesses.(Mondaq)
Put it together and you get a simple truth:
If you run a clinic or dental practice in Canada, chances are your next major equipment purchase will be financed—likely through a lease or other asset-based structure rather than a traditional bank loan alone.
Equipment leases let small clinics and dental practices spread the cost of new equipment over 3–7 years, using the equipment itself as the main collateral. That’s why leasing is usually the first option to explore for chairs, imaging, sterilization, and most diagnostic equipment.
You can see Mehmi’s overview of how this works here: Equipment Financing – Overview.
The mechanics are straightforward:
Because the lease is tied to the actual asset, underwriting focuses heavily on:
Mehmi focuses on financing tangible, revenue-generating gear across many sectors; their list of Eligible Equipment includes medical, dental, and aesthetic equipment commonly found in clinics.
Most deals fall into one of three buckets:
Mehmi’s Equipment Leases page digs into these structures in more detail.
For clinics and dental offices, leasing lines up with how you actually operate:
Contrarian take: too many clinics still treat equipment as a “buy it once in cash” decision. In reality, if the tech will be obsolete before the end of its economic life, it often makes more sense to lease and plan for a scheduled upgrade.
If your clinic or dental practice already owns expensive equipment—maybe you bought a digital pan or ultrasound machine a few years ago—there may be equity trapped in those assets that you can use today.
That’s where refinancing or a sales-leaseback comes in.
You can explore this route with Mehmi’s Refinancing or Sales Leaseback service.
In a typical sales-leaseback:
This is especially powerful for:
The sales-leaseback turns those sunk costs into usable working capital, while keeping your equipment in place and insured.
Refinancing or sales-leaseback can be smart when:
It’s less attractive when:
In those cases, you may be better off leasing new equipment and retiring the old unit instead of re-leveraging it.
If you’re running a multi-chair dental office, a multi-location group practice, or a clinic that’s steadily adding treatment rooms or services, one-off leases can start to feel like too many moving pieces.
For that stage, equipment lines of credit and asset-based lending (ABL) can simplify life.
An equipment line of credit gives you a pre-approved limit dedicated to equipment and related costs. You draw on it as needed, and each draw converts into a term schedule.
This is useful when you:
You can see how this works on Mehmi’s Equipment Line of Credit page.
Asset-based lending ties your borrowing limit to the value of a pool of assets—primarily equipment, sometimes receivables or inventory.(cfla-acfl.ca)
For larger practices, ABL can:
You can learn more about how Mehmi approaches these structures on the Asset Based Lending page.
These tools aren’t just for big corporations—many multi-clinic dental groups and specialty practices now use asset-based structures similar to other mid-sized Canadian businesses, because they scale better than one-off loans.
While leasing should usually finance the equipment itself, small clinics and dental practices also have non-equipment costs:
That’s where traditional business loans and working capital products come in. Banks like BDC highlight that equipment loans and term financing can sometimes cover up to 125% of the cost to include shipping, installation, and training.(BDC.ca)
Mehmi offers several complementary products on its Business Loans – Overview page.
A working capital loan is a term facility designed to cover day-to-day operating needs rather than a specific piece of equipment.
For clinics and dental practices, this might fund:
You can explore this option via Mehmi’s Working Capital Loan.
A revolving line of credit is like a reusable overdraft:
It’s not ideal for buying a six-figure CBCT, but it’s perfect for smoothing uneven cash flow. Mehmi outlines this on its Line of Credit page.
Some clinics prefer a secured term loan (backed by assets) or an unsecured loan (no specific collateral, but relying on cash flow and credit scores):(BDC.ca)
Merchant cash advances and ultra-short-term online loans can be tempting when you need money tomorrow. They’re sometimes marketed to healthcare and dental practices.(SBS SPE)
My blunt view:
For most clinics and dental practices, a merchant cash advance should be a last resort, not a first option.
The effective cost is often far higher than a normal loan or lease. If you’re considering one, talk to a lender or advisor who can compare it with more sustainable options. Mehmi does offer Merchant Cash Advance solutions, but only where the math genuinely works and as part of a broader plan.
Here’s a simplified comparison of your main options when buying new medical or dental equipment:
You can play with numbers and terms for your own situation using Mehmi’s online Calculator.
Whether you work with a bank, BDC, or a specialist like Mehmi, the credit questions are similar. Canadian financing guides emphasize that you need a clear purpose, realistic projections, and supporting documentation.(BDC.ca)
For a small clinic or dental practice, underwriters will typically focus on:
Mehmi works across many sectors; you can see the range on their Industries page.
If you’re a startup clinic, this can matter more than your current financials.
Lenders are mainly asking: “Will this clinic comfortably make the payments?”
Lenders like BDC emphasize that a strong equipment financing proposal clearly links the gear to future cash flow.(BDC.ca)
This is where working with a specialist can pay off. Mehmi’s team lives in these structures every day and can help ensure your security package is appropriate, not excessive. You can learn more about the team on the About Us page.
Here’s a practical roadmap you can follow as a clinic owner, dental partner, or practice manager.
1. Map out what you actually need
List the equipment and related costs—chairs, imaging, software, installation, training, and any minor renovations. This helps you see what should be leased versus financed another way.
2. Decide on your primary structure
For most clinics and dentists:
3. Gather basic documents early
Even fast-moving lenders need some paperwork. Typically:
Having this ready can shave days off the process.
4. Build a simple case for the upgrade
You don’t need a 30-page business plan. A one-page summary can do the job:
This aligns with BDC’s guidance that your financing request should clearly explain what you need, why you need it, and how you’ll repay it.(BDC.ca)
5. Talk to a specialist, not just your bank
Banks and credit unions are crucial partners, but they aren’t always optimized for equipment-heavy health businesses. Asset-based finance is literally built around paying off equipment over time, with the asset as security.(cfla-acfl.ca)
Mehmi focuses on this space, from Equipment Financing to tailored Business Loans, and can walk you through structures your primary bank might not offer.
6. Stress-test your cash flow
Before you sign:
7. Plan future upgrades now
Finally, put a note in your calendar for 6–12 months before your lease ends. That’s the ideal time to:
Mehmi’s Blog and FAQ sections are good places to keep an eye on financing trends that affect this decision.
If you want help mapping the whole plan out, you can always reach out through Contact Us.
Background
A two-chair general dental practice in suburban Alberta had been using film X-rays and an older analog pan. The owner wanted to:
Cash in the bank was healthy but earmarked for taxes and a potential satellite location in a few years. The owner didn’t want to wipe out savings for equipment.
Equipment wish list
Total project cost from the vendor came to $210,000, including installation, training, and warranty.
Financing structure
Working with a Mehmi advisor, they implemented a layered solution:
Outcomes
Within 6 months of install:
The key: they didn’t burn cash reserves on equipment. Instead, they used equipment leasing and a working capital loan to match payments to revenue, while keeping bank credit available for future opportunities.
For most practices, an equipment lease with a healthcare-savvy finance provider is the best starting point. It ties repayments to the life and revenue of the equipment, preserves cash, and keeps your bank line free. Mehmi’s Equipment Financing and Equipment Leases are designed around this approach.
Yes, but the lender will lean heavily on:
Startup clinics often start with smaller initial leases and build up to larger facilities as they develop a track record. Having a good vendor quote and a clear plan for patient flow helps.
Using a bank line for small items (e.g., a laptop, a $5,000 sterilizer) is fine. But for big-ticket items like a CBCT or a full operatory, it’s usually better to:
This avoids tying up your main safety net in long-term assets. Mehmi’s Line of Credit page explains how a revolving facility fits alongside leases.
It depends on ticket size, type of equipment, credit strength, and whether you’re a startup or established practice. Some strong borrowers can get $0 down structures; others may put 10–20% down to improve approval chances or lower payments.
A common pattern is something like a 72-month lease with a modest down payment and a small residual/buyout. A Mehmi advisor can show you options side by side using their Calculator.
Yes, often you can. Banks like BDC note that some equipment financing products can cover more than 100% of the purchase price to include shipping, installation, and training costs.(BDC.ca)
In practice, specialist lenders like Mehmi will usually:
You can explore:
They’ll walk you through what’s realistic based on your size, specialty, and goals—without forcing you into a one-size-fits-all product.
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