Restaurant Equipment Financing

Leasing Restaurant Equipment Offers Potential Savings Compared to a Purchase.

No restaurant pays it's staff in advance: they pay as they contribute. It is no different with renting restaurant equipment or leasing. Equipment finance enables you to make a affordable monthly payments as you use the restaurant equipment. The equipment lease is like your restaurant employees. The kitchen equipment can generate positive cash flow to respond to new business startup opportunities. The profits generated from the productivity of the equipment purchase is usually greater than the lease payments.

• Low monthly payments — spread costs over 12 to 60 months
• Fast approval — credit decisions often within 24 hours
• No large upfront cost — 100% financing available on most equipment
• Loans and leases available — own the equipment or keep options open to upgrade
• New and used equipment — both qualify for financing

Why Equipment Finance?

Small and medium sized restaurant business owners face the constant challenge of managing cash flow, merchant cash advance, business line of credit while investing in improvements to operations. Today's successful restaurants are able to acquire new equipment to keep their new businesses competitive while preserving working capital and credit score. Our lenders, specialists, and financial institution partnership offers multiple funding sources that provide restaurant owners with flexible restaurant financing solutions and repayment terms to lease or purchase the equipment they need without a down payment or collateral. Whether you are looking for restaurant loans, a small business loan for your restaurant, or a dedicated equipment program, we can help find the right path for your operation.

Restaurant Equipment Loans

A restaurant equipment loan is a direct financing option where you borrow the full cost of the equipment and repay it in fixed monthly installments. The equipment itself serves as collateral, which typically makes approval faster and more accessible than a traditional restaurant business loan or unsecured restaurant lending product.

How Restaurant Equipment Loans Work

Once approved, funds are applied directly to your equipment purchase. You own the equipment from day one — it goes on your balance sheet as an asset, and the loan appears as a liability that decreases with each payment. When the loan term ends, the equipment is yours outright with no further obligation.

Equipment loans are ideal when you plan to use the equipment long-term and want to build equity in your assets. Fixed monthly payments make cash flow planning straightforward, and interest paid on the loan is typically tax-deductible as a business expense.

Restaurant Equipment Loan Eligibility

Most lenders evaluate the following when reviewing a restaurant equipment loan application:

• Time in business — six months to one year preferred, though startup options are available
• Annual revenue — minimums typically range from $100,000 to $250,000
• Credit score — a FICO score of 550 or higher is a common starting point with specialized lenders; traditional banks may require 620+; the equipment collateral makes this more flexible than unsecured lending
• Equipment quote — a detailed vendor quote specifying the equipment, model, and total cost

Because the equipment secures the loan, restaurant equipment financing is more accessible than many other forms of business credit — including merchant cash advances and unsecured business lines of credit.

Restaurant Equipment Financing for Startups

New restaurants without an established operating history can still qualify. Startup restaurant financing and funding for restaurant startups is available through specialty lenders who focus on the equipment value as collateral, your industry experience, and a realistic business plan rather than years of revenue history. A larger down payment may be required in some cases, but 100% financing is available for qualified applicants.

Restaurant Equipment Financing with Bad Credit

Past credit challenges don't automatically disqualify you. Because the equipment serves as security, lenders can look beyond credit scores to current cash flow, revenue trends, and time in business. Alternative lending partners work specifically with restaurant owners who have been turned down by traditional banks.

SBA Loans for Restaurant Equipment

The U.S. Small Business Administration offers two loan programs well-suited to restaurant equipment purchases: the SBA 7(a) loan and the SBA 504 loan. An SBA loan for a restaurant provides competitive rates for acquiring heavy or high-value equipment — commercial ovens, walk-in coolers, full kitchen buildouts — that might exceed what standard equipment financing programs cover. SBA restaurant financing is also a strong option for startup restaurant business financing where conventional lenders may require more history than a new operator has.

• SBA 7(a) — the most flexible SBA loan type; can be used for equipment, working capital, and other business needs; loan amounts up to $5 million; terms up to 10 years for equipment
• SBA 504 — designed for fixed asset acquisition including major equipment; provides long-term, fixed-rate financing; typically used for purchases over $150,000; requires a Certified Development Company (CDC) partner

SBA loans generally require more documentation than standard equipment financing — at least two years of business history, tax returns, and financial statements. Approval timelines are longer. For restaurants that qualify, the trade-off is lower interest rates and longer repayment terms that keep monthly payments manageable on large purchases.

Leasing Restaurant Equipment Advantages

Restaurant Equipment Leasing Financing Options Provides the Restaurant Industry an Alternative Source of Capital.

Restaurant equipment financing frees working capital for productive use (since the money is not tied up in restaurant equipment). For a successful restaurant, bars, food trucks, restaurateur chefs and coffee shops that are a startup business, or any existing restaurant that wants to expand, create that dream restaurant, have limited funds for capital to take their business to the next level, leasing equipment may be the best option to protect and preserve the restaurants capital. Financing might be the best option for an under-capitalized restaurateur wanting to open new locations or upgrade a piece of equipment like a grill.

Cost less than other methods of acquiring restaurant equipment.

Restaurant Equipment Lease Provides a Hedge Against Inflation

The leasing payment terms may provide a hedge against inflation, since the monthly payments will be made with cheaper dollars which save your restaurant a lot of money. Fixed lease payments protect you from future price increases on equipment like refrigerators, freezers, char broil grills, planetary mixers, stove ranges, ice machines, commercial ovens, dishwashers, and fryers. Restaurant equipment financing may act as a hedge against inflation, which provides the basis for strong arguments supporting ownership.

Does not appear as a liability on the lessee balance sheet.

Leaves normal lines like a credit card undisturbed.

Permits hedging of restaurant business risk.

Financing New Restaurant Equipment with Warranties Extends the Length of Financing Commercial Kitchen Equipment.

In contrast to typical merchant cash advance, business line of credit, bank loan, working capital loan, term loan and restaurant equipment loans, which are generally available only for a period of time that is significantly less than the life of the commercial equipment, leases may be obtained for nearly the total length of the equipment warranty. Atosa Refrigerators, Atosa Freezers, Atosa Sandwich Prep Tables, and Pizza Prep Tables come with a long term five year compressor warranty. True Refrigeration and True Freezers have a 3-year parts and labor warranty and a 5-year compressor warranty. The result is a reduced cash outflow during the initial period of the restaurant equipment, with the cost spread over a longer lease agreement. The benefit is two fold. First, costs tend to be more nearly correlated with revenues over the entire life of the asset. Second, a discounted cash flow analysis will usually indicate a higher return on investment when cash payments are spread out over the entire asset life.

Leasing and Equipment Finance Provides Exact Amount Financing.

Unlike some forms of debt financing that vary in cost as a function of the prime interest rate, lease payments for equipment finance are almost always uniform over the length of the lease.

Restaurant Equipment Financing Allows More Flexible Cash Budgeting

This is an important corollary to the preceding benefit. Many intermediate-term business loans have balloon repayment features, whereby the bulk of the principal is due at the end of the loan and, if the restaurant maintains its credit rating, forms the basis for a new loan. Such refinancing exposes the restaurants to additional financial risk if interest rates and/or the availability of capital. The uncertainty as to availability of refinancing necessitates a more conservative liquidity position. Possible changes in the restaurant owners financial situation, bad credit, recent bankruptcy (and fluctuations in interest rates, if interest is tied to the prime rate) it makes cash budgeting more difficult and can negatively affect the restaurants financial future and force business owners to pay the full purchase price for new equipment or buy used restaurant equipment without any warranty.

Leasing Provides Total Financing

Lease loan repayments are usually made at the end of each period, with the start of each period, with the first payment due at the start of the lease the first payment due at the end of the month (or some other period) after purchase. These factors affect the cash flow budget and the timing of cash flows.

Lease options provide restaurant equipment financing for acquisition plus related costs.

Lease restaurant equipment permits 100 percent financing.

The total acquisition cost, including sales taxes and delivery and installation charges, may be included as a part of the equipment finance agreement and spread over the life of the lease. These front-end costs may be substantial and thus result in heavy initial cash outflows if assets are purchased.

Leasing Provides Fast, Flexible Financing

May be tailored to the lessee need to be more easily than ordinary type of financing.

Avoids the restriction frequently found in bank loan agreements.

Leasing tends to be faster and more flexible than borrowing funds. Your restaurant lease contract and affordable monthly payments may be arranged to meet the seasonal cash flows of the restaurant, and may be tailored to the specific need of the applicant, restaurateur, and lessee. Financial leases is a contract under which a lessee agrees to make a series of payments to a lessor which in total exceeds the purchase price of the equipment acquired. Typically, payments under a financial lease term are spread over a period of time equal to the major portion of the useful life of the equipment. During this initial term of the lease, the contract is not cancel-able by restaurant or leasing company. The lessee is committed to continue leasing the restaurant equipment until the end of the lease.

Specialty Financing Programs

Beyond standard loans and leases, vendor financing programs provide additional flexibility for restaurants at every stage. Some options available through our lending partners include:

• Deferred payment programs — start using your equipment immediately and defer payments for 90 days, giving your new kitchen time to generate revenue before the first payment is due
• Low-start options — promotional programs with payments as low as $99 per month for the first six months, stepping up to standard payments once your operation is established
• Seasonal payment structures — payment schedules designed to match seasonal cash flow patterns, with lower payments in slow months and higher payments during peak revenue periods
• $1 buyout leases — structured as a lease for accounting purposes, with a $1 purchase option at end of term; effectively a loan with lease-like payment structures
• Fair Market Value leases — lower monthly payments with the option to purchase at fair market value, return, or upgrade at end of term

Vendor financing — financing arranged directly through an equipment supplier — is often the fastest route to getting your kitchen equipped. Because the supplier has a relationship with the lender, applications are streamlined and approval decisions come back quickly.

Loans vs. Leasing: Which Is Right for Your Restaurant?

Feature	Equipment Loan	Equipment Lease
Ownership	You own it from day one	Leasing company owns it during term
Monthly Payment	Typically higher	Typically lower
End of Term	Equipment is yours, debt-free	Return, renew, or purchase
Balance Sheet	Asset + liability recorded	Operating expense (no asset/liability)
Tax Treatment	Deduct interest + depreciation	Lease payments fully deductible
Upgrade Flexibility	Lower — you own the equipment	High — upgrade at end of term
Best For	Long-term use, building equity	Frequent upgrades, lower payments

What Equipment Can You Finance?

Most commercial kitchen equipment qualifies for financing or leasing. Common items include:

• Cooking equipment — commercial ovens, ranges, charbroilers and griddles, deep fryers
• Refrigeration — reach-in refrigerators, commercial freezers, Atosa refrigerators, True refrigeration
• Ice machines — commercial ice makers
• Food prep — planetary mixers, slicers, food processors
• Warewashing — commercial dishwashers
• POS systems and technology — hardware, software, and payment processing
• Furniture and fixtures — dining room tables, chairs, and FOH equipment

Smaller items can often be bundled into a single financing agreement — you don't need a separate loan for every piece of equipment.

Section 179 Deduction

Section 179 is a good option for small and medium-sized businesses and borrowers. Any business that finances less than $1,000,000 in restaurant equipment (new or used) during the tax year should qualify for the IRS Section 179 Tax Deduction. Say $10,000 is the initial cost of a piece of equipment for your new restaurant. By taking advantage of Section 179, you can deduct the entire $10,000 from your net income in the first year you use it. So, assuming you are in a 35% tax bracket, you will have a $3,500 tax deduction, meaning the true cost of the equipment is only $6,500. That is good news — that is a lot of money to your bottom line, and now you can reinvest the savings in your restaurant. The credit application takes less than 5 minutes and final approval generally takes 24–48 hours. Consult your tax advisor to confirm eligibility and current limits for your tax year.

Do You Have a Business Plan?

Do you have good credit? Have you checked your credit report for errors? Do you know your personal credit rating and business credit score? Does your restaurant have a business plan?

Frequently Asked Questions

How quickly can I get approved for restaurant equipment financing? Most applications are reviewed within 24 to 48 hours. The credit application takes under five minutes to complete. Once approved and documents are signed, funds are typically available within one to two business days.

Can I finance used restaurant equipment? Yes. Both new and used commercial kitchen equipment qualify for financing. Inspect used equipment thoroughly before purchase — the equipment serves as collateral, so lenders will want a clear description and value of what's being financed.

What happens at the end of a restaurant equipment loan? Once all scheduled payments are made, you own the equipment outright. No further payments, no buyout — the asset is yours debt-free.

What is the difference between a restaurant equipment loan and a lease? A loan means you own the equipment from day one and build equity with each payment. A lease means you use the equipment for a set term with lower monthly payments, with the option to return, renew, or purchase at the end. Loans are better for long-term ownership; leases are better for flexibility and lower monthly costs.

Can I finance restaurant equipment with bad credit? Yes. Because the equipment serves as collateral, restaurant equipment financing is more accessible than most business loans. Lenders evaluate your current cash flow and revenue in addition to credit history. Options are available for startups and owners with past credit challenges.