Dentists and medical practices can choose from several finance options, including unsecured business loans, credit cards, overdrafts, credit lines, merchant cash advances, asset finance and outside investment. The right option depends on what the money is needed for, how quickly it is required and whether the practice can manage regular repayments.
Key points
- Short-term finance can help with cash flow, tax bills and unexpected costs.
- Asset finance can spread the cost of equipment and technology.
- Larger expansion projects may require investment or a combination of finance options.
Why might a dental or medical practice need funding?
There are many reasons why a practice may need additional finance. These can include:
- Buying new dental, medical or diagnostic equipment
- Refurbishing or expanding existing premises
- Buying another practice
- Recruiting additional staff
- Managing cash flow between receiving income and paying expenses
- Covering unexpected repairs or costs
- Investing in new technology and software
- Funding marketing and business development
- Managing tax or other large business payments
The wider small business finance market also shows that external funding remains an important part of business finances. Around 50% of smaller UK businesses used external finance in 2025. Credit cards were used by 19% and overdrafts by 16%.
What finance options are available?
- Unsecured business loans
- Credit cards
- Bank overdrafts
- Business credit lines
- Merchant cash advances
- Asset finance, including leasing and hire purchase
- Venture capital and outside investment
What are typical loan rates charged to dental and medical practices?
| Finance product | Typical UK rate/cost | Typical use |
|---|---|---|
| Unsecured business loan | Around 5%–30% APR | Expansion, working capital, refurbishment |
| Business credit card | Around 18%–30% APR | Smaller purchases and short-term spending |
| Business overdraft | Often base rate + 2%–4% | Short-term cash flow |
| Business credit line | Around 0.9%–3.5% per month on the amount drawn | Flexible working capital |
| Merchant cash advance | Factor rate around 1.10–1.50 | Short-term funding against card sales |
| Asset finance / hire purchase | Around 5%–10% APR | Dental and medical equipment |
| Leasing | Typically priced according to the asset, term and provider | Equipment without outright purchase |
| VC / outside investment | No interest rate; investor takes equity | Major expansion or growth |
Unsecured business loans
An unsecured business loan allows a practice to borrow money without securing the loan against a specific business asset. The lender will usually look at the financial performance of the practice, its affordability and the credit history of the business and its owners.
Whilst it might be called dental practice loans, or medical loans, they all fall under unsecured business loans. This can be useful for refurbishment, recruitment, working capital or other projects where there is no specific asset to finance.
Credit cards can provide a flexible way to manage smaller purchases and short-term expenses. They can be particularly useful for cash flow, although interest costs can become expensive if balances are not repaid.
An overdraft provides another flexible option. It allows a practice to spend beyond the cash available in its business bank account, up to an agreed limit. A business credit line works in a similar way, allowing funds to be drawn when needed rather than taking the full amount at once.
The British Business Bank reported that gross bank lending to smaller businesses reached £68 billion in 2025, an increase of 9% on the previous year.
Merchant cash advance
A merchant cash advance is designed for businesses that take regular card payments. Instead of making a traditional fixed loan repayment, the provider advances money and then takes an agreed percentage of future card sales.
This can make repayments move with revenue. A practice with stronger card sales will generally repay more during busy periods and less when sales are lower.
It can be useful for practices with regular card income that need funding quickly. However, the total cost should be carefully considered, particularly when comparing it with other forms of borrowing.
Asset finance
Asset finance is often suitable for dentists and medical practices because equipment can represent a significant investment. It can be used for items such as dental chairs, scanners, imaging equipment, computers and other specialist technology.
With hire purchase, the business normally pays for the asset through agreed instalments and may own it once the agreement has been completed. Leasing allows the practice to use equipment for an agreed period without necessarily owning it.
Asset finance is an established part of the UK business finance market. New asset finance business for smaller companies reached £24.4 billion in 2025, up 4% on 2024 and the fifth consecutive year of growth.
VC and outside investment
Venture capital and other forms of outside investment can provide larger amounts of funding for practices with ambitious growth plans. This might include building a group of practices, developing a healthcare business or investing heavily in technology.
Unlike a loan, equity investment generally involves giving an investor a share of the business. There is therefore no traditional loan repayment, but the owners may give up part of their control and future profits.
Outside investment is more commonly suited to businesses with significant growth potential than an established practice simply looking to replace equipment.
Choosing the right option
The best finance structure will depend on the purpose of the funding, the practice’s cash flow and how quickly the money is needed. A dental practice buying a new scanner may have different requirements from a medical practice opening a second location.
It is worth comparing the total cost, repayment terms and any security or personal guarantees before committing to finance. Using a combination of finance options can also be appropriate, particularly when a practice is managing both short-term cash flow and longer-term investment.
