Sale-Leaseback Financing

Chairs, imaging systems, and milling units you own free and clear are sitting on a balance sheet. A sale-leaseback converts that value into cash you can use today while letting you continue using the equipment without interruption. The structure is simple: you sell the equipment to a financing company at an agreed value, they lease it back to you under a monthly payment arrangement, and you walk away with a lump sum that goes wherever your practice needs it most.

This structure fits a specific scenario: a practice with equity in its assets but a need for liquidity. Maybe you want to open a second location, renovate your current space, hire an associate, or fund a major marketing push. Selling the equipment outright removes it from your practice. A sale-leaseback lets you monetize the value without giving up the tools your schedule depends on. We handle sale-leaseback transactions on dental chairs and full operatory packages, CBCT and 3D imaging units, CAD/CAM systems, and most major durable dental assets.

How a Sale-Leaseback Is Structured

The transaction has two simultaneous components. First, the financing company purchases your equipment at an agreed value, typically based on a combination of original cost, age, condition, and market comparables for similar dental assets. You receive that purchase price as cash. Second, a lease agreement begins immediately. You make monthly lease payments to use the same equipment you just sold, with the lease term and payment amount structured at closing.

At the end of the lease term, you typically have options: buy the equipment back at fair market value or a pre-agreed price, return it, or roll into new equipment. The structure can be tailored to your goals at the time of closing. Practices that expect to replace the equipment before the term ends often negotiate FMV buyout terms. Practices that plan to keep the asset indefinitely often prefer a $1 buyout or a fixed-price purchase option built into the lease from day one.

• Immediate lump-sum cash from assets you already own
• No interruption to practice operations
• Lease term and payment structure set at closing
• Equipment purchase option at end of lease
• Minimum transaction $50,000

When a Sale-Leaseback Makes Sense

The right candidate for a sale-leaseback is a practice that paid for equipment out of pocket, paid off a prior loan, or received equipment as part of a practice acquisition and now holds significant value in those assets. The most common versions we see involve equipment purchased three to seven years ago that is still functionally current but has been fully expensed or is approaching payoff.

Practices financing a second location find this structure especially useful. Rather than applying for a new loan against unproven revenue from a yet-to-open site, you can leverage the proven value of equipment at your existing location to fund the expansion. The cash from the leaseback covers tenant improvements, cabinetry, and initial supply inventory at the new site while your first location's production supports the new monthly lease payment.

Dental service organizations and multi-location group practices use sale-leaseback structures routinely as a portfolio-level capital tool, treating owned equipment across their locations as a pool of unlockable capital for acquisition financing or facility upgrades. Even a single-location practice with $200,000 to $500,000 in owned assets can generate meaningful working capital this way.

Documentation and Credit Considerations

Sale-leaseback applications require documentation on the assets being monetized as well as the practice's creditworthiness. Asset documentation typically includes purchase invoices or appraisals, current condition statements, and in some cases photographs. The financing company needs to establish value and confirm clear title, meaning no outstanding loans secured against the equipment.

If there is an existing loan on the equipment, a sale-leaseback can still work if the outstanding balance is low enough that the lender can pay it off and advance you the net difference. This is sometimes called a cash-out refinance with a leaseback component. Credit review follows the same standards as any dental equipment transaction: time in practice, personal and business credit, and production trend matter. Application-only processing (no financial statements) is available for packages under approximately $400,000.

The tax treatment of a sale-leaseback can be favorable. The cash received is typically not income (it's a sale of an asset). The lease payments become operating deductions. Work with your CPA before closing to understand the implications for your practice's specific tax situation, particularly if the equipment was previously depreciated under Section 179 or bonus depreciation rules.

Comparing Sale-Leaseback to Similar Structures

A sale-leaseback differs from a cash-out refinance in one key way: in a cash-out refinance, you keep title to the equipment and add a new lien. In a sale-leaseback, you sell the title to the financing company. Both generate cash. The right choice depends on how the practice is structured, the accounting treatment desired, and whether the equipment is already encumbered.

If your primary need is not cash but payment relief, a standard equipment refinance is the cleaner option. It restructures existing debt without converting the asset to a leaseback structure. For practices that own equipment outright and simply want liquidity, though, the sale-leaseback often generates more cash in hand than any other mechanism short of an outright sale.

See What Your Equipment Is Worth

Tell us what you own, roughly when it was purchased, and how much capital you're looking to unlock. We'll review your asset profile and come back with a realistic leaseback structure and advance estimate. There's no commitment required to get the numbers.