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Can you buy dental equipment with a business line of credit?
Yes, and plenty of practices do, usually because the line already exists and drawing on it takes an afternoon rather than a week. The convenience is real, but a line of credit and a dental equipment loan are built for different jobs, and using the revolving tool for a capital purchase has consequences that show up months later rather than on the day you draw.
Pros of using a line of credit for dental equipment
- Speed. If the line is already approved, funds are available same-day. When a chair fails on a Tuesday and you need a replacement by Friday, this matters more than the rate.
- You pay interest only on what you draw. A $150,000 line costs nothing while it sits unused.
- Reusable capacity and no per-transaction application. One facility can fund several purchases across a year.
- It funds what equipment loans will not: deposits and progress payments, de-installation and transport, leasehold work, the electrician, staff training, ramp-up payroll for a new operatory.
- Useful for small purchases. Below roughly $15,000 to $20,000, the paperwork of an equipment loan is disproportionate.
- A bridge to permanent financing. Some practices draw on a line to hit a December 31 placed-in-service deadline, then term the balance out with an equipment loan in January. Legitimate, provided the takeout is arranged before you draw rather than hoped for afterward.
Cons of using a line of credit for dental equipment
- The rate is variable. At 7.00% prime, a line at prime + 2% costs 9.00%; if prime rises 200 basis points over three years, your cost rises with it, on a balance you are still carrying. A fixed equipment loan locks the payment for the full term.
- It gets re-underwritten every year. At renewal the bank can reduce the limit, raise the spread, add a cleanup requirement, or decline to renew, often for reasons that have nothing to do with you. $80,000 of equipment on a line that gets cut to $50,000 is a problem an amortizing loan would never create.
- The blanket lien. A line is typically secured by a UCC-1 covering all business assets. An equipment loan files only against the equipment it financed. A blanket lien has to be subordinated or released before anyone else will take a position.
- It consumes your working capital cushion. A line exists to absorb a slow insurance quarter, a payroll that lands wrong, an unexpected repair. Parking a five-year asset on it converts your emergency tool into a term loan.
- No amortization discipline. $60,000 on a line at 9.00% costs about $438 a month in interest and can sit there indefinitely. The same $60,000 as a five-year loan at 9% is $1,246 a month and is gone in sixty payments.
- Lower limits and shorter terms. Practice lines commonly run $25,000 to $500,000, much of it meant for operations, and rarely term out to the 7 years available on equipment, or 10 on an SBA loan. Some lines also require the balance to hit zero for 30 consecutive days each year, which is impossible for a capital purchase.
Line of credit vs. equipment loan, side by side
Published market ranges as of September 2026. WSJ prime rate is 7.00%.
The payment comparison that decides most cases
Take a $60,000 equipment purchase. On a line at prime + 2% (9.00%), interest-only, the payment is about $438 a month. Three years in, the $60,000 principal is still outstanding, on a variable rate, against an annual renewal. As a five-year equipment loan at 9%, the payment is $1,246 a month, total cost about $74,730, and the debt is retired on a known date at a rate that cannot move. The line looks $800 a month cheaper.
It is not cheaper, only unamortized. That $800 is the part you have not paid yet.
When a line of credit is the right call
Purchases under roughly $15,000 to $20,000. Emergency replacement where a machine is down and revenue is stopped. Deposits and progress payments before equipment ships. Soft costs equipment financing will not cover. A deliberate short-term bridge to a December 31 deadline, with the takeout already arranged. And anything you intend to repay within 12 months from a known source.
When an equipment loan is clearly better
Any asset with a five-year-plus service life: chairs, cabinetry, compressors, vacuum, sterilizers. Purchases above $25,000. When you want a fixed payment you can plan around, when you want to preserve line capacity for operations, when you want to keep the balance sheet clean of a blanket lien, and when you need a term longer than three years to make the cash flow work.
Does equipment bought on a line of credit still qualify for Section 179?
Yes. Section 179 follows ownership and the placed-in-service date, not the funding source. A $60,000 CBCT bought with a draw on a line and operational before December 31 is generally eligible for Section 179 and 100% bonus depreciation on the same terms as equipment bought with a term loan or cash. Interest on the line is separately deductible as business interest expense. Confirm with your CPA.
Use both. That is the actual answer
Most well-run practices carry a line of credit and use equipment financing, and keep the two jobs separate. The line handles timing, emergencies, deposits, and the costs no equipment program will touch. Equipment loans handle capital assets, matched to their service life and secured by the equipment itself. One caution: each will see the other on your debt schedule and test coverage against the whole picture.
Neither is a problem. Undisclosed obligations are.
Five West programs at a glance
Most practices need both tools eventually, and the structure conversation should not be limited to whichever product one lender happens to sell. We write the full line, so the recommendation follows the asset rather than our shelf.
- Rates
- Priced to your credit profile, term, and equipment; competitive with a bank on rate, not on speed
- Terms
- 24 to 84 months, with 10 years on SBA loans
- Amounts
- $15,000 to $5 million+
- Application only
- Up to $500,000 with no tax returns or financial statements
- Credit
- Established businesses from 600+, startups from 700+
- Equipment
- New, used, refurbished, dealer, and private-party purchases
- Speed
- Same-day options on qualified files, with approvals in as little as 30 minutes
- Coverage
- Nationwide and U.S. territories
Tell us what you are buying and how long you will keep it. We will tell you which structure fits, even when the answer is the line of credit you already have.
Free consultation, no obligation. All financing is subject to credit approval and underwriting; rates and terms depend on the complete business and credit profile.
The bottom line
Pros: speed, interest only on what you draw, reusable capacity, no per-transaction paperwork, and it funds soft costs equipment financing excludes. Cons: variable rate, annual renewal risk, a blanket lien on every practice asset, no amortization discipline, lower limits, shorter terms, and it consumes the working-capital cushion you may need later. For a chair you will own for a decade, the fixed-rate equipment loan wins on nearly every dimension that matters. For a deposit, an emergency, or a $9,000 sterilizer, draw on the line and move on. For anything above that, send us the quote: A-credit pricing from 7% to 9% on terms out to 84 months.
Line of credit or equipment loan: your questions
Can you use a business line of credit to buy dental equipment?
Yes, but it is usually the wrong tool for capital purchases. A line of credit is revolving, variable-rate, re-underwritten annually, and typically secured by a blanket lien on all practice assets. Equipment loans are fixed-rate, term-matched to the asset’s service life, and secured only by the equipment. Use a line for timing gaps and small purchases, and an equipment loan for anything with a five-year-plus service life.
What are the pros of using a line of credit for dental equipment?
Speed: same-day funds if the line is already open. You pay interest only on what you draw, and capacity is reusable as you repay. There is no per-transaction paperwork, and it funds soft costs equipment financing caps or excludes, such as deposits, installation, electrical work, transport, and training. It is also more efficient than a loan for purchases under roughly $15,000 to $20,000.
What are the cons of using a line of credit for dental equipment?
The rate is variable and floats with prime. The facility is re-underwritten annually, so the limit can be reduced or not renewed. It is typically secured by a blanket lien on all business assets, which complicates future borrowing. It consumes the working-capital cushion the line exists to provide. Minimum payments are often interest-only, so the balance does not amortize. Limits are lower and terms shorter than equipment financing.
Is a line of credit cheaper than an equipment loan?
The monthly payment is usually lower, but the total cost is often higher. A $60,000 balance on a line at 9.00% interest-only costs about $438 per month while leaving the full principal outstanding. The same $60,000 as a five-year equipment loan at 9% costs $1,246 per month and retires the debt in sixty payments. A line of credit is not cheaper, only unamortized.
What is the interest rate on a business line of credit in 2026?
Business lines of credit commonly price at prime plus 1% to 3%. With the Wall Street Journal prime rate at 7.00% as of September 2026, that is roughly 7.75% to 10.00% for a strong practice. Broader market ranges run 8% to 25% depending on credit profile, and all line-of-credit pricing is variable and moves with prime.
Does equipment bought with a line of credit qualify for Section 179?
Yes. Section 179 follows ownership and the placed-in-service date, not the funding source. Equipment purchased with a draw on a line of credit and made operational before December 31 is generally eligible for Section 179 and 100% bonus depreciation on the same terms as equipment bought with a term loan or cash. Interest on the line is separately deductible as business interest expense.
What is a blanket lien and why does it matter?
A blanket lien is a UCC-1 filing that covers all business assets rather than one specific asset, so it reaches equipment, receivables, and general intangibles alike. A line of credit typically requires one; equipment loans usually file only against the financed equipment. A blanket lien must be subordinated or released before another party will take a position, which can complicate or delay future borrowing.
Should I have both a line of credit and equipment financing?
Most well-run practices do, and keep the roles separate. The line handles timing gaps, emergencies, deposits, and soft costs equipment financing will not fund. Equipment loans handle capital assets matched to their service life. Disclose both everywhere, because each will test debt service coverage against your full obligations, and undisclosed debt is a far bigger problem than disclosed debt.
Not sure which structure fits?
Tell us what you are buying and how long you will keep it. We will tell you which tool is right, even when the answer is the one you already have. Or run the numbers yourself first in the Quote Builder. No credit pull, no obligation.
Related dental financing guides
More on financing equipment for a dental practice.
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This article is general information about commercial equipment financing and is not a commitment to finance. All financing is subject to credit approval and underwriting. Rates, terms, and approval depend on the complete business and credit profile. Figures shown are illustrative market ranges gathered from published sources as of August 2026 and are not an offer. Five West Financial is not a tax advisor or an accounting firm; confirm any tax treatment with your CPA before relying on it.