A Laser Clinic Owner's Guide to Refinancing Business Loans

The largest loan in a laser clinic can be the one on the equipment in the treatment rooms: the diode laser for hair removal, an IPL, a CO2 resurfacing laser or a picosecond laser for pigment and tattoo work. This guide shows how to read what that loan is costing you, what a refinance can and cannot change, and which of the clinic's records come into it.

Does the monthly repayment on the laser feel heavy against what its bookings bring in? Do you feel you are going backwards, with most of each payment still going to interest while the device ages? Is the loan set to run longer than you expect to keep the machine in the treatment room? Have you left the equipment loans and the fit-out loan where they are because sorting them all out feels like too much on top of a full appointment book?

Ardent Capital Group can help you refinance every loan the clinic carries, from the laser and the IPL to the fit-out, and we would be glad to work through them with you.

Why most of the repayment on a laser is interest

When more than half of each repayment goes to interest, a loan can feel as though it is going backwards. Early in a loan the amount still owed is at its highest, and each month's interest is worked out on that amount. That feeling is a fair reason to look at the loan again.

Every repayment on an equipment loan has two parts. Interest is the lender's charge for the money still owed. Principal is the amount that reduces the balance.

On an amortising loan, the repayment stays the same each month, and the loan runs down to nil by the end of the term, unless it ends in a balloon. A balloon is a lump sum left owing after the last regular repayment. Interest is worked out each month on the balance outstanding. While that balance is large, interest takes a larger share of each repayment. As it falls, more of the same repayment goes to principal.

Your loan statement shows this split. It lists the interest charged in the month, and the balance before and after the repayment. A payout letter shows it too. That is the current lender's written statement of the amount needed to pay the loan out on a set day. Compare the balance on two statements a year apart. If it is lower, the loan is being repaid, even when the interest line is the larger number.

A real enquiry: a laser clinic owner's $180k loan

One owner's statement shows this split in practice.

A laser clinic owner who leases their rooms wrote to us about the business loan used to buy the clinic's laser equipment. About $180k was owing on a 7-year loan. The repayment was about $3,610 a month, and the statement showed about $1,900 of each one going to interest. In the owner's words, the loan felt like "going backwards", and the question was whether there was a way to better it.

We started by mapping the loan as it stood: the interest share of each repayment, what the balance would do over the next year, and the interest still to come. From there we looked at the questions that decide whether a refinance helps. They were the early payout terms in the contract, how long the device will stay in service against the years left on the loan, and whether the owner wanted their home involved at all.

Worked example: where the owner's repayment goes

With the balance owing, the repayment and the interest inside it, the rest of the loan can be worked out.

The working assumes no fees in the interest line and no balloon.

• The rate. Interest of that size on that balance points to a rate of about 12.7% a year.
• Each repayment. About $1,710 a month goes to principal.
• The next 12 months. The balance falls by about $21.8k. The loan is being repaid, even though more than half of each repayment is interest.
• If nothing changes. The loan clears in about 71 months, with about $77k of interest still to come.

So the balance comes down every month, and the principal share grows as it falls.

A balloon payment, a fee folded into the interest line or a different rate would change these figures. That is why the payout letter from the current lender comes first.

The laser's working life against the loan term

Clinics replace or upgrade lasers as treatments change, but the loan that paid for one keeps its own fixed timetable.

So a 7-year loan on a laser can run past the point where the clinic wants a newer machine. Suppliers release new handpieces, wavelengths and platforms. A clinic adding a new treatment may want the newer machine before the old loan is paid off.

Two questions help before deciding anything:

• What effective life does your accountant use for the device? Effective life is the number of years an asset can be used to produce income, taken from the ATO's determination or worked out by the business. It is a tax figure, not a promise of how long the equipment will run. It sets the period the device is depreciated over for tax. It helps to compare it with the months left on your loan.
• When does the clinic expect to replace it? That date depends on the device's upgrade cycle, its service contract, and how worn the handpieces and cooling tips are getting.

If the loan runs longer than the device stays in your rooms, you may still owe money on equipment you have traded in. A refinance can make that gap wider or narrower. A longer term widens it. A shorter term narrows it. So can refinancing the old device and funding the new one as one loan, which lines the debt up with the next machine. It helps to settle the loan at the same time as the upgrade decision.

Lower repayments versus total interest on the clinic's loans

For a laser clinic, the repayment is the number felt every month, booked out or not, while total interest is spread across every month left. A refinance can move the two in opposite directions.

A refinance moves three things: the rate, the term and what secures the loan. Each one changes the monthly repayment and the total interest in its own way.

• Rate. A lower rate on the same term lowers both the repayment and the total interest. The rate on offer depends on the lender, what secures the loan, the clinic's trading and your credit history.
• Term. A term is the length of the loan, usually stated in years or months. A longer term lowers the repayment and raises the total interest, because the balance is outstanding for longer.
• Security. Security means what a lender can turn to if repayments stop, such as an asset or a personal guarantee. Moving from equipment or unsecured lending to a loan secured by property generally carries a lower rate. It also makes that property security for the clinic's debt.

Example: the owner's loan over four terms

Here is the owner's loan with only the term changed. The rate stays the same in every option, so the differences come from the term alone.

Each new term is measured against the loan as it stands today, by what it does to the monthly repayment and to the interest still to pay.

All figures are rounded and worked from the owner's statement. They leave out early payout charges, fees and any change in rate, which the contract and the new lender set. None of them is a quote.

Stretching the loan to 10 years brings the repayment down from $3,610 to $2,650 a month, which is about $960 less. Over the life of the loan, it adds about $61k of interest, taking the interest from here to about $138k.

The lower repayment can still suit a clinic for a set period: while fitting out a second site, while a new nurse's appointment book fills, or through a quieter season. Before choosing it, it helps to check whether the new loan allows extra repayments once that period ends.

Interest on a business loan may be tax deductible. Interest the ATO charges on overdue tax is not deductible from 1 July 2025. How either applies to you is a question for your accountant.

Consolidating the clinic's debts into one loan

Besides the laser, a cosmetic clinic can carry debt on its treatment rooms, its stock and its tax, each with its own rate and due date. Consolidating means paying several of these out with one new loan.

A good first step is to write every debt on one list, with the lender, balance, repayment, rate, what secures it and the date it ends. A cosmetic clinic's list commonly includes:

• the loan on the laser or IPL, and any loan on an RF microneedling or body contouring device
• the fit-out loan for treatment rooms, the consult room, reception and the plumbing behind the basins
• an overdraft that carries injectables, skincare stock and consumables between orders
• an ATO payment plan, if the BAS fell behind. On the BAS, the business activity statement, a laser clinic declares two main taxes to the ATO. One is GST, short for goods and services tax, collected on treatment fees. The other is PAYG withholding, meaning tax withheld from therapists' pay.
• personal debts: the home loan, a car loan and credit cards that have paid for clinic costs

An overdraft is a limit on the business account that the clinic can draw on and pay back as cash comes and goes. An ATO payment plan is an arrangement to pay overdue tax in instalments.

Consolidating several of these can mean one repayment on one date. Where property secures the new loan, it can also mean a lower rate.

The cost is that debts on assets that wear out sooner, such as a device or a fit-out in leased rooms, end up spread over a longer term. And an overdraft folded into a term loan stops being a buffer you can draw on.

Your personal debts count even when the refinance is only for the clinic. Lenders include your home loan and car loan repayments when they assess what you can afford, and they generally assess a credit card by its limit rather than its balance. What you draw from the clinic to run the household is part of the same sum. If your home loan is part of the conversation, our home loans for business owners cover that side.

What secures a laser clinic refinance

For a laser clinic, the choices depend on whether the clinic owns its rooms, what its devices would sell for, and whether a home or a guarantee is offered.

A clinic that leases its rooms in a shopping centre or a retail strip has no clinic property to offer as security. That leaves four common arrangements:

• The device itself. An equipment lender takes security over the laser. The device invoices and service history record its age, model and condition.
• A general security agreement. Under a GSA, the lender holds rights over all of the business's assets, the lasers and skincare stock included. The lender records it on the PPSR, the national register of security interests in personal property. It does not cover land, buildings or fixtures to land. When you move lenders, the outgoing lender's registration is released at payout and the new lender registers its own.
• A director's guarantee. With one, a director agrees to repay the debt personally should the clinic be unable to. Unsecured business loans, which are not secured by a particular asset, are commonly supported by a personal guarantee from each director.
• Your home. Residential property as security generally brings a lower rate and a longer available term. It also means the home secures a device that may be replaced within the life of the loan. If your home already secures clinic debt, a later refinance can aim to release it once the clinic's trading supports the loan without it.

If you own the rooms your clinic operates from, the property can support a different kind of loan, and our page on refinancing a cosmetic or skin clinic property covers it.

When to hold off on refinancing the clinic's loans

The timing of a refinance can change what it saves the clinic. A few situations are better settled before an application goes in, and each one comes with something to prepare.

• The payout cost is larger than the saving. Fixed-rate equipment loans can carry an early payout charge set by the contract. It helps to get the lender's payout figure in writing. This figure is the sum needed to pay out the loan in full on a chosen day. It can then be set against the interest a new loan would save.
• The loan is close to its end. With only a year or so left, most of the interest has already been paid. That time can go toward planning the next device's finance instead.
• A quiet stretch is showing in your bank statements. Keeping booking reports for the months either side helps, and the refinance can be looked at again once a few stronger months are on the statements.
• BAS or the last tax return is not lodged. It helps to lodge them first, because lenders assess a business loan on lodged figures.

Bookings, packages, wages and the lease

A laser clinic's money comes in through appointments and prepaid packages, and goes out on wages, consumables and servicing. Your bank statements and booking reports show both sides.

• Bookings and card takings. Most clinic income is private pay, since cosmetic laser work attracts no Medicare rebate. It is taken by card at the front desk or through an online booking system. Bank statements show its rhythm week to week.
• Prepaid treatment packages. A course of laser hair removal sold upfront is cash received for sessions the clinic still has to deliver.
• Wages for registered nurses and laser therapists. Wages and super show on the statements every pay run, beside the bookings each practitioner carries.
• Consumables and device servicing. Cooling gel, replacement tips and handpieces, and the device service contract are regular costs that sit against income on the statements.
• The lease. The years left on the lease matter to a lender looking at a fit-out loan, because the treatment rooms stay with the premises.
• Your credit history and any ATO debt. Lenders check the credit file of the business and each director, and the ATO statement of account. The statement of account is the ATO's record of what the business has paid and still owes.

Documents to gather for a clinic refinance

Most of the paperwork comes from the booking system, the bank and your accountant. Gathering it in this order keeps the work moving.

• Payout letters for every debt you might include, each showing the balance, the rate, any early payout charge and whether there is a balloon.
• Recent business bank statements and your latest BAS.
• The last two years of financials and tax returns, plus year-to-date figures if the year is well advanced.
• The ATO statement of account, and the payment plan if you have one.
• The lease, with the start date, options and the term remaining.
• Device invoices showing the make, model, serial number and purchase date, and the service history.
• Booking-system reports for monthly revenue and prepaid packages sold and redeemed.

With these in hand we can map each debt, compare the options side by side and take the application to lenders whose policy suits a clinic like yours.

Questions laser clinic owners ask about refinancing

More than half my repayment is interest. Is my balance actually going down?

Yes, on a standard equipment or business loan the balance falls with every repayment. Interest is charged on what you still owe, so it is largest at the start and shrinks each month. Comparing the balance on two statements a year apart shows it.

Can I pay out the loan on my laser early, and what does that cost?

Usually you can, and the cost is whatever your contract sets for early payout. It differs between lenders and between fixed and variable loans. It helps to ask your current lender for a written payout figure that shows any early payout charge, and to compare it with what a new loan would save.

If I stretch the term to bring my repayment down, how much more will I pay overall?

More in total, because interest runs on the balance for longer. On an equipment loan at a rate in the low teens, stretching six remaining years to ten cuts the repayment by about a quarter. It also adds about 80% to the interest still to come. It can still suit a cash-flow gap with a known end, such as fitting out a second site.

Do I have to put my house up to refinance?

Not necessarily. An equipment loan can be refinanced against the device, and an unsecured loan against the clinic's trading and a director's guarantee. Using your home generally brings a lower rate, and it makes the home security for the clinic's debt, so it is your choice to make with the trade-off in view.

My laser will probably need upgrading before the loan finishes. What then?

The payout of the old loan and the finance for the new device can be planned together. It helps to ask your accountant what effective life is used for the current device and compare it with the months left on the loan. The supplier's upgrade quote belongs in the same conversation.

The supplier is offering a new machine on finance. Can my old loan be rolled into it?

It can be, and the result is a larger loan on the new device. Supplier-arranged finance is one offer among several. We can compare it with other lenders and show the repayment and total interest of each option before you sign.

I also have a fit-out loan and an overdraft. Can they become one repayment?

Yes, they can be consolidated, subject to the lender's assessment. One repayment on one date is simpler to manage. A fit-out in leased rooms is best repaid within the lease, and an overdraft folded into a term loan stops being a buffer, so we would set out both effects first.

How do prepaid treatment packages show in my records?

Sessions clients have paid for but not yet used are treatment the clinic still owes, and a clear record helps. A report from your booking system showing packages sold and redeemed each month answers the question directly.

Clients book less when money is tight. Will a quiet few months count against me?

A dip shows in your bank statements and BAS. A booking-system report comparing the same months across two years shows whether the dip is seasonal or a change in trading. That comparison puts the quieter months in context.

Will looking at a refinance show up on my credit file?

A payout request and a conversation with us do not. A formal credit application is recorded on the file of the business and each director, so we send it only to lenders whose policy fits a cosmetic clinic's trading.

Talk to us about your clinic's loans

Refinancing a laser clinic's debt is a decision about rate, term and security, set against how long the device will stay in your rooms and how the clinic's income arrives. At Ardent Capital Group we can assist with refinancing the loans on devices and fit-outs, consolidating a clinic's debts, and the business loans and working capital a cosmetic clinic draws on. The Ardent Capital Group team brings a background in financial planning to how the new loan could sit across your clinic and household debts, and your accountant confirms the tax side before anything is signed. If the repayment on your laser feels heavy, we can go through the numbers with you.

Written by

Nick Chong

Managing Director, M.AppFin, Dip. Mortgage Mgmt

Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.