A business line of credit can buy dental equipment, but it is usually the wrong tool for it. 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 life, and secured by the equipment itself.
Pricing as of August 2026: a line of credit commonly runs prime + 1% to 3%, or about 7.75% to 9.75% for a strong practice, and 8% to 25% more broadly. Equipment loans run roughly 7% to 20% depending on credit. Use a line of credit for timing gaps and small purchases; use an equipment loan for anything with a five-year-plus service life.
Five West writes equipment finance, leases, leaseback, SBA, and working capital, so the structure follows the asset rather than whichever product one lender sells.
Can you buy dental equipment with a business line of credit?
Yes, and plenty of practices do. Usually that is because the line of credit already exists and drawing on it takes an afternoon rather than a week. The convenience is real, but a line of credit and an 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.
Below is the honest case for each side.
Pros of using a line of credit for dental equipment
Speed. If the line of credit is already approved, funds are available same-day. No application, no underwriting cycle, no waiting on a credit committee. 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 of credit costs nothing while it sits unused. Draw $40,000 and you pay interest on $40,000. An equipment loan starts amortizing the full balance from day one whether or not the equipment is producing yet.
Reusable capacity. Repay a draw and the room comes back. For a practice making several equipment purchases across a year, one facility can fund all of them without a new application each time.
No per-transaction application. Each equipment loan means a fresh submission, which is application-only for most transactions but still a step. A line of credit is underwritten once a year and drawn at will.
It funds what equipment loans will not. Deposits, progress payments, de-installation and transport on a used purchase, leasehold work, the electrician, staff training, and the ramp-up payroll for a new operatory are all soft or non-collateral costs. Equipment lenders cap or exclude them; a line of credit does not care what you spend it on.
Useful for small purchases. Below roughly $15,000 to $20,000, the origination cost and documentation burden of an equipment loan is disproportionate. Drawing on a line of credit is simply more efficient.
Bridge to permanent financing. Some practices deliberately draw on a line of credit to hit a December 31 placed-in-service deadline, then term the balance out with an equipment loan in January. That is a legitimate and sometimes very profitable use, 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. A line of credit floats with prime. At 6.75% prime today, a line of credit at prime + 2% costs 8.75%; if prime rises 200 basis points over the next 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. For a ten-year asset, that certainty has real value.
It gets re-underwritten every year. This is the risk most practices underestimate. A line of credit is an annual facility. At renewal the lender can reduce the limit, raise the spread, add a cleanup requirement, or decline to renew. Often the reason has nothing to do with you, such as the bank tightening its exposure to healthcare. If you have $80,000 of equipment sitting on a line of credit that gets cut to $50,000, you have a problem an amortizing loan would never have created.
The blanket lien. A line of credit is typically secured by a UCC-1 covering all business assets: equipment, receivables, and general intangibles. An equipment loan files only against the equipment it financed. That difference matters the next time you borrow, because a blanket lien has to be subordinated or released before another lender will take a position, and that is a negotiation you may not win at the moment you need it.
It consumes your working capital cushion. This is the central objection. A line of credit exists to absorb timing gaps like a slow insurance quarter, a payroll that lands wrong, or an unexpected repair. Parking a five-year asset on it converts your emergency tool into a term loan and leaves you without the thing the line of credit was for. Practices discover this at exactly the wrong moment.
No amortization discipline. Revolving debt has a minimum payment, often interest-only. $60,000 on a line of credit at 8.75% 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. A line of credit feels cheaper monthly and is frequently far more expensive over the life of the asset.
Lower limits. A practice line of credit commonly runs $25,000 to $500,000, and much of that capacity is meant for operations. Equipment financing routinely goes to $1 million and beyond on the strength of the collateral.
Terms are shorter. Even when a line of credit permits a term-out, it rarely stretches to the 7 to 10 years available on equipment. Financing a decade-long asset over three years compresses cash flow with no offsetting benefit.
Cleanup provisions. Some lines of credit require the balance be brought to zero for 30 consecutive days each year. That is manageable for seasonal working capital and impossible for a capital purchase.
Line of credit vs. equipment loan, side by side
Published market ranges as of August 2026. WSJ prime rate is 6.75%.
The payment comparison that decides most cases
Take a $60,000 equipment purchase. On a line of credit at prime + 2% (8.75%), 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 of credit 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–$20,000, where loan origination is disproportionate
- Emergency replacement where a machine is down and revenue is stopped
- Deposits and progress payments before equipment ships
- Soft costs an equipment lender will not cover: installation, electrical, training, transport
- A deliberate short-term bridge to a December 31 deadline, with the takeout already arranged
- 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-of-credit capacity for operations
- When you want to keep the balance sheet clean of a blanket lien
- 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. If you buy a $60,000 CBCT with a draw on a line of credit and it is operational before December 31, it 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 of credit 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 of credit handles timing, emergencies, deposits, and the costs no equipment lender will touch. Equipment loans handle capital assets, matched to their service life and secured by the equipment itself.
One caution if you do both: your equipment lender will see the line of credit on your debt schedule and test coverage against the drawn balance, and your bank will see the equipment loans. 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 select programs
- Amounts
- $20,000 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 a few hours
- Coverage
- Nationwide, U.S. territories, and cross-border
Tell us what you are buying and how long you will keep it, and 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 lenders exclude. 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 of credit and move on. For anything above that, send us the quote: A-credit pricing from 7% to 9% on terms out to 84 months.
On rates: Any range on this page is illustrative rather than a quote. Your actual rate can come in higher or lower, and it depends on personal and business credit, time in business, the equipment itself, the term you choose, and the size of the transaction. Two files for the same machine can price differently. It is also worth checking the date on anything you read elsewhere. A good deal of the equipment-finance content still circulating was written when prime was 3.25%, and prime is 6.75% today, so if you happen to come across rates like 5% or 6%, it is worth confirming whether the page is current before you plan around it. The surest way to know your number is to let us price your file.
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 of credit 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 of credit 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 lenders cap or exclude, 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 of credit 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 of credit at 8.75% 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 6.75% as of August 2026, that is roughly 7.75% to 9.75% 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 of credit 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 lender 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 of credit handles timing gaps, emergencies, deposits, and soft costs equipment lenders will not fund. Equipment loans handle capital assets matched to their service life. Disclose both to every lender, because each will test debt service coverage against your full obligations, and undisclosed debt is a far bigger problem than disclosed debt.
Related dental financing guides
More on financing equipment for a dental practice.
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.
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.