The business model of the American healthcare practice is changing. Across dental offices, veterinary clinics, med-spas, and specialty care providers, a quiet structural shift is underway: the growing adoption of third-party financing as a standard feature of patient-facing operations.
A service that started as a niche option for major elective procedures is now a common way for practices to boost revenue and keep patients. Its effects on practice value, attracting new patients, and staying competitive are just starting to become clear.
The Problem Third-Party Financing Solves
To understand why the model has spread so quickly, it helps to understand the problem it addresses.
Healthcare providers — particularly those operating in dental, veterinary, vision, and elective care — face a persistent conversion challenge. A patient arrives, receives a recommended treatment plan, and then declines to proceed. In most cases, the reason is not clinical disagreement. It all comes down to the cost.
The data is unambiguous on both fronts. A 2024 report from the ADA Health Policy Institute found that 13 percent of the U.S. population faced cost barriers to dental care, more than three times the rate reported for medical care, mental health services, or prescription drugs, according to a parallel KFF analysis. Out-of-pocket spending accounts for nearly 39 percent of all dental expenditures in the U.S., almost four times the out-of-pocket share of general healthcare spending.
In veterinary care, the numbers are equally stark: a 2024-2025 PetSmart Charities-Gallup study of nearly 2,500 pet owners found that 52 percent had skipped or declined needed veterinary care in the past year, with 71 percent of that group citing cost as the primary reason. A companion Gallup survey of practicing veterinarians, conducted in late 2025, found that 94 percent said financial considerations prevent them from providing recommended treatment regularly.
If there is no way to bridge the gap at the point of care, the practice loses revenue, and the patient misses out on needed care. Structured third-party financing solves this by turning a large, one-time payment into fixed monthly installments. This helps more consultations lead to completed procedures. The impact of this change is significant, and it is the main reason the model is being adopted so quickly.
How the Market Has Matured
The third-party healthcare financing space has consolidated around a handful of major players since emerging in its modern form. CareCredit, the longest-tenured product in the space, operates as a revolving healthcare credit card accepted across a large provider network. Newer entrants have differentiated on structure and approval criteria — offering fixed installment loans rather than revolving credit, and designing approval processes intended to serve patients across a wider range of credit profiles.
Cherry Financing is now one of the fastest-growing platforms in its field, with a network of more than 50,000 provider locations in dental, veterinary, medical, and aesthetic practices. This growth reflects broader shifts in provider preferences. When practices offer several financing options, they often choose Cherry over other products at much higher rates, based on the company’s data. This trend matters for business analytics because it points to provider satisfaction with approval rates, patient experience, and how well the platform fits into their operations, not just the result of marketing efforts.
Sunbit, PatientFi, and Scratchpay are also active in this market, each with its own approach. There is no single dominant provider yet, so many practices offer several financing options to help more patients get approved, regardless of their credit profile.
The Practice-Level Economics
Healthcare practices face a clear choice when considering third-party financing. The financing company pays the practice directly after the procedure, usually within a few days, but charges a processing fee based on a percentage of the financed amount. In return for a small reduction in revenue, the practice gets fast, reliable payment and avoids the risk of chasing collections.
The financial benefits are even greater when you consider how third-party financing helps more patients accept treatment. If a practice performs procedures that patients might have otherwise declined, the extra revenue can easily cover the financing fee. This is especially true for expensive treatments like dental implants, orthodontics, major veterinary care, or cosmetic procedures, where even a small increase in accepted cases can make a big difference in revenue.
This trend is now showing up in practice valuations. Buyers, especially in dental and veterinary fields, are paying closer attention to whether a practice has strong patient financing systems in place, since this indicates how effectively the practice captures revenue. Practices with strong third-party financing and clear data on patient conversions are seen as more reliable than those that depend only on insurance or self-pay.
Broader Sector Implications
The rise of third-party financing in healthcare services reflects a broader trend: installment credit is becoming a standard feature of many consumer industries. Buy-now-pay-later options have changed retail, and subscription financing has changed how people buy software. Now, healthcare is seeing a similar shift, although the rules and the unique relationship between patients and providers make things more complicated than in other industries.
Investors and analysts watching the healthcare services sector should pay attention to how financing infrastructure is becoming a key way for companies to stand out. Clinics that offer more patient financing often see higher revenue per patient and fewer people dropping out of treatment. On a larger scale, companies that build and run these financing networks are gathering valuable data and building strong relationships with providers, giving them a lasting edge as the market gets more crowded.
The question for healthcare operators is no longer whether to offer financing, but rather how to do so. That decision has largely been made across the industry. The strategic question is which programs to carry, how to present them in the patient conversation, and how to measure their impact on conversion and patient lifetime value. Those are fundamentally business analytics problems — and the practices that approach them as such are increasingly the ones pulling ahead.
