This article is sponsored content brought to you by BOQ Specialist.
With the ever-increasing demands on dental professionals to run practices more efficiently, the productivity of both staff and equipment is a serious issue.
To get the best results for your patients, you need the right equipment in your surgery. But that equipment comes at a cost. The upfront cost of equipment like CEREC machines, X-ray and OPG equipment, intraoral cameras and more is significant. The way you pay for that equipment may be different depending on your career stage.
For example, a brand new surgery will require a different cashflow structure to a well-established clinic looking to expand its treatment options. That, in turn, will have an effect on how you pay for that important equipment. The average bank won’t understand your business enough to help you make that decision. But BOQ Specialist will.
Depending on your circumstances, we work with your financial advisers and accountants to tailor an arrangement which fits with your tax structure. We also conduct a cash flow projection, considering factors such as how many patients need to be seen over the life of an asset to ensure it is profitable.
What’s the best type of finance for me?
There are a number of different ways to finance capital equipment. The right one for you depends on the stage of your career, the type of practice you have, and how you currently structure your finances. Options include:
Hire purchase loan: With this loan type the lender purchases the assets you need and then hires them to you over an agreed contract period. You use the assets over the period of the contract, but the lender owns them until the loan and interest have been repaid in full.
BENEFITS: As a general rule, interest rates are often very competitive with a hire purchase loan, as the loan is secured by the assets purchased. Repayments are fixed, and there are generally no ongoing fees. You may be able to claim the interest and depreciation as a tax deduction.
Chattel mortgage: This loan is similar to a commercial hire purchase, except you own the assets for tax purposes from the time of purchase.
BENEFITS: Similar to a hire purchase, in that it offers competitive interest rates, fixed repayments, and general no ongoing fees, and you may be able to claim the interest and depreciation as a tax deduction. A difference between this and a hire purchase loan will be the treatment of GST for tax purposes, so make sure you talk to your financial adviser or accountant about which one is best for your individual situation.
Lease: Under a lease agreement we purchase your assets, and your payments are split into a number of monthly lease payments and a residual. You pay rent on your assets and, at the end of the period, you can elect to purchase the goods for the residual amount. Once the residual is paid, the ownership of the assets is transferred to you.
BENEFITS: There are generally no ongoing fees and your full lease payments may be tax deductible.
Professional overdraft: An overdraft facility can be secured or unsecured, and you can make interest-only repayments or pay down the overdraft with principal repayments.
BENEFITS: You only pay interest on what you use rather than the whole credit limit, and the interest may be tax deductible. There are generally no ongoing fees. Our One Account includes an option for an overdraft facility (subject to credit approval where appropriate).
Choosing the right equipment isn’t that challenging. Working out the best way to finance it is. As expert “tools of the trade” lenders, BOQ Specialist provides a tailored service to dentists and are committed to the ongoing process of assessing and modernising your dental equipment.
The credit provider is BOQ Specialist – a division of Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian Credit Licence no. 244616 (BOQ Specialist). Terms and conditions, fees and charges and lending and eligibility criteria apply. We reserve the right to cease offering these products at any time without notice. BOQ Specialist is not offering financial, tax or legal advice. You should obtain independent financial, tax and legal advice as appropriate.
The information contained in this article (“Information”) is general in nature and has been provided in good faith, without taking into account your personal circumstances. While all reasonable care has been taken to ensure that the information is accurate and opinions fair and reasonable, no warranties in this regard are provided. We recommend that you obtain independent financial and tax advice before making any decisions.