CBCT scanner finance for dental practices

Most dental treatment is exempt from VAT, so most practices are either not VAT registered or are partly exempt, and cannot reclaim all of the VAT charged on equipment. On hire purchase that VAT is payable with the deposit and stays a cost of the purchase. On a lease it is spread across the rentals, which is one reason leasing is more common for dental imaging than for veterinary imaging, where the VAT comes back. A practice with meaningful taxable income, for example from cosmetic treatments or sales of products, should ask its accountant how the partial exemption rules apply before choosing between the two. Either way, compare the options on the total you will pay including VAT, not on the headline monthly figure.

On tax, a practice that buys on hire purchase can usually claim capital allowances on the scanner, and the Annual Investment Allowance often covers the whole cost in the year of purchase. Lease rentals are generally deducted as an expense instead. Our guide to asset finance and capital allowances goes into the detail.

Illustration only, with round hypothetical figures. A three-surgery mixed practice places a growing number of implants and refers every case out for CBCT. It is quoted £70,000 plus VAT for a combined OPG and CBCT unit with planning software, £12,000 for the radiation protection adviser's room design, shielding, electrics and commissioning, and £3,000 for CBCT training. The purchase is arranged like this.

• The £70,000 scanner goes on hire purchase over five years with a £7,000 deposit, so £63,000 is financed and the practice owns the unit after the final payment and claims capital allowances on it.
• VAT of £14,000 is due at the outset. The practice is not VAT registered, so the VAT is a real cost. The lender agrees to include it in the agreement rather than ask for it with the deposit, which raises the financed amount to £77,000.
• The £15,000 of works and training goes on an unsecured term loan over three years with a personal guarantee from the principal.
• The lender's question is whether current profit, plus a cautious estimate of the implant and referral income the scanner supports, comfortably covers both new repayments alongside the existing practice loan.

Had the practice preferred a lease, the £14,000 of VAT would have been spread across sixty rentals instead of added to the loan, at the cost of never owning the scanner. Monthly figures depend on the lender, which is why it pays to see more than one offer before signing the supplier's paperwork.

• The supplier's quote, showing scanner, software, installation and training separately
• The last two years of accounts and recent management figures
• Three to six months of business bank statements
• A schedule of existing finance, including the practice loan and any chair or imaging agreements
• A short note on the cases currently referred out and the income expected in-house
• For a refurbished scanner, its age, serial number, detector and software support position, and proof of the seller's ownership

Our dental practice loans page covers what lenders look for in a practice as a whole, and how to finance a dental practice sets out the wider picture.

New units carry the longest terms and the fullest warranties. Ex-demonstration and refurbished scanners from the manufacturer or an approved dealer are widely financed, usually over a shorter term, and can be a sensible route for a practice adding CBCT for the first time. Lenders are cautious about private sales of older units because detector technology and software support move quickly, and a scanner that the manufacturer no longer supports has little resale value. If you already own imaging and chairs outright, sale and leaseback or asset refinancing can release cash towards a new scanner. For a wider view of medical imaging as an asset class, see medical equipment finance.

A CBCT pays for itself only if the cases come through, so be honest about implant and endodontic numbers before committing to a five-year agreement. Check the service contract and software licence fees, which continue whether or not the finance does, and whether a lease has a secondary rental period that runs on until you give notice. Make sure the room works have been designed by the radiation protection adviser before you order, because a scanner that cannot be installed still has to be paid for. A practice carrying several small equipment agreements can find that lenders offer less when it later wants to buy premises or a second site; see dental practice premises finance. If the practice is new, squat practice finance explains how a scanner fits into a start-up budget.