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Animal hospital equipment is expensive. Veterinary practice owners sometimes put off a digital radiography upgrade for years because it costs more than a year of profit.
That's where veterinary equipment financing comes in. Instead of paying for expensive equipment all at once, you can spread the cost out over a longer period of time.
I've arranged more than $900 million in financing for business owners. Below, I go over the routes to buy equipment, what lenders consider, and how to decide between leasing and buying.
| Financing type | Down payment | Typical term | Interest rate | Commonly used for |
|---|---|---|---|---|
| Equipment loan | None, up to 100% financed | 12 to 72 months | Starting at 6% APR | Long-life machines you plan to keep |
| Equipment lease | Usually the first payment | 12 to 60 months | Varies by lessor and residual value | Technology that dates quickly |
| SBA 7(a) loan | Varies by lender and use | Up to 10 years for equipment | About 9.75% to 13.25% | Large purchases or a clinic build-out |
| Business line of credit | None | Revolving, 6 to 36 months | Starting at 6% APR | Smaller tools and working capital |
| HELOC | None, your house secures the line | Draw period up to 5 years, repayment up to 30 years | As low as prime | Higher-cost purchases |
Types of Veterinary Equipment Financing
Veterinary practice loans let you cover needed equipment without completely draining your cash reserves. Here are a few routes to consider.
Equipment loans
A lump sum you use to cover the cost of a single machine. The equipment is the collateral.
Equipment leasing
Pay to use a machine over a set term. At the end of an operating lease, you return the machine to the owner. At the end of a capital lease, you own the equipment.
SBA 7(a) loans
These loans are backed by the U.S. Small Business Administration (SBA). Lenders typically offer lower rates and longer terms.
SBA 504 loans
SBA program for major assets like real estate or equipment. It covers machinery with at least 10 years of useful life left.
Business line of credit
A revolving credit line you can draw on to pay for smaller equipment like centrifuges, microscopes, and dental scalers.
Home equity line of credit (HELOC)
A type of revolving credit line, but this one is secured by your home. Use it for large equipment purchases.
How Veterinary Equipment Financing Works
Follow these four steps when you're ready to apply for veterinary equipment financing.
Price and select the equipment. Get quotes from a few different vendors before you sign anything.
Pick a lender. Online lenders, banks, and equipment vendors all finance veterinary equipment. Compare them on interest rates, terms, and fees.
Gather your documents. Expect to submit bank statements, recent tax returns, a vendor quote, and basic financial information.
Apply and review the offer. Read all the terms and conditions, including any fees required.
Speed is another factor to consider. Online lenders typically finance an equipment loan in a few days, while SBA lenders take longer (30 to 90 days from application to close).
Minimum Qualifications
$10,000 in monthly revenue
Your business must earn at least $10K per month in a business bank account.
500+ credit score
You can get approved with any credit score. But the better your credit rating, the better interest rates lenders offer. Your FICO score should be above 500.
Minimum six months in business
Your company should be operational for a minimum of six months. This shows business lenders that your company is sustainable and won't go out of business.
Have a business bank account
Your Clarify advisor will need three or four months of your most recent bank statements to verify income. This is just to see you're actually making $10K+ month in revenue.
What Lenders Consider
While timelines and requirements vary, lenders typically consider the same few things when approving an equipment loan.
Revenue and cash flow
You'll need enough monthly income to cover any new payments, on top of anything you already owe.
Time in business
Lenders see an established clinic as less risky than a brand-new practice.
Personal credit score
Lenders review your credit score, which can impact your interest rate.
Business credit history
This includes how the practice has handled past vendor accounts.
Loan size and equipment value
Risk varies depending on the size of the loan and the overall value of the equipment.
The equipment as collateral
Equipment loans are secured, meaning the machine is the collateral.
What the Equipment and the Financing Cost
Prices vary widely depending on the vendor, but here are some typical ranges for common veterinary equipment.
| Equipment | Typical price range |
|---|---|
| Digital radiography | $25,000 to $50,000 |
| Fluoroscopy suite | Up to $85,000 |
| Portable ultrasound | $10,000 to $25,000 |
| High-end ultrasound | $25,000 to $50,000+ |
| Anesthesia machine | $2,000 to $20,000 |
If you decide to finance your equipment, you pay interest on top of the price of the equipment.
For example, let's say you're building out a full surgical suite for a multi-veterinarian animal hospital. You finance a $25,000 ultrasound at a 9% interest rate. Spread over 36 months, the payment runs about $795, and you'll pay $3,620 in total interest. Over 60 months, the payment drops to $519, but you pay $6,140 in interest.
Watch for fees, too. Origination and documentation fees sometimes apply to equipment loans.
Leasing vs. Buying Veterinary Equipment
Whether to lease or buy depends on the type of equipment you need. Long-life assets like anesthesia machines, kennel systems, and digital radiology equipment make more sense to own. Lab analyzers and imaging software require more frequent updates and may make more sense to lease.
| A lease tends to fit | A loan tends to fit |
|---|---|
| Technology that dates quickly | Equipment you plan to keep for a long time |
| The business needs to keep payments low and preserve cash | You want to own the machine outright |
| You expect to upgrade the equipment at the end of the term | The equipment has a high resale value |
| Manufacturer bundles service and upgrades | You'd rather pick your own service vendor |
If you decide to buy your equipment, you can deduct it on your taxes. A deduction isn't a discount. Instead, it lowers the income you pay tax on.
Normally, the Internal Revenue Service (IRS) allows you to deduct equipment over about five years. Section 179 of the IRS tax code lets you deduct the entire amount in the first year.
Match the Financing to the Machine You Need
The right financing depends on what your cash flow can carry. Clarify Capital works with small to midsize businesses across healthcare to compare routes. We shop your application across our network of 75+ vetted, reputable lenders.
Apply today. Checking your options won't impact your credit score.
FAQs on Veterinary Equipment Financing
These are the most common questions I get about veterinary equipment financing.
Do SBA Loans Cover Veterinary Equipment Financing?
Yes, the SBA lists purchasing and installing machinery as an approved use for a 7(a) loan. These loans go up to $5 million.
What Credit Score Do You Need for Veterinary Equipment Financing?
For equipment financing through Clarify Capital's network of lenders, you need a minimum credit score of 550. For an SBA 7(a) loan, you need a minimum credit score of 640.
Can You Finance Used or Refurbished Veterinary Equipment?
Many lenders finance certified refurbished equipment from an established dealer. The lender will likely request documentation on the equipment's condition and value. Terms may be shorter than on new equipment.
Is It Better to Lease or Buy Veterinary Equipment?
Neither is a better option all the time. It depends on what you're buying. Leasing tends to fit technology that updates frequently, while buying fits long-life equipment.
How Long Are the Repayment Terms on Veterinary Equipment Loans?
Through Clarify Capital's network of lenders, equipment financing typically runs 12 to 72 months. A business line of credit revolves around six to 36-month terms, and SBA loans go up to 10 years for equipment.
What If Equipment Becomes Obsolete Before It's Paid Off?
This is a common worry that I hear. Match the terms to the realistic useful life of the equipment. Lean on leasing when you plan to update the equipment often.
Is My Information Safe When I Apply to Clarify Capital?
Yes, Clarify follows SOC 2 security principles, and we handle your application data carefully.
Bryan Gerson
Co-founder, Clarify
Bryan has personally arranged over $900 million in funding for businesses across trucking, restaurants, retail, construction, and healthcare. Since graduating from the University of Arizona in 2011, Bryan has spent his entire career in alternative finance, helping business owners secure capital when traditional banks turn them away. He specializes in bad credit funding, no doc lending, invoice factoring, and working capital solutions. More about the Clarify team →
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