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Restaurant Equipment Financing in 2022: All You Need to Know

Mar 30, 2022 • 8 min read
restaurant equipment financing what to know
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      Whether you’re starting a new restaurant or looking to make some updates to your established cafe, restaurants are powered by their equipment. How do you get started? With restaurant equipment financing. Tapping into financing options is an excellent way to make a long-term investment in the tools you need to get the work done.

      What Is Restaurant Equipment Financing?

      All restaurants need equipment, and today many food operations demand intense, specialized items like commercial mixers, walk-in fridges, flat-top stove ranges, and pizza ovens. The high  sticker price on these items can be prohibitively expensive for small business owners, especially if you’re a new restaurateur or looking to expand an already existing business.

      Restaurant equipment financing is a lending tool aimed at fixing this conundrum. Equipment financing empowers small business owners to buy a piece—or several pieces—of equipment and pay back the financing over a period of time. Restaurant equipment financing, therefore, is a way restaurateurs can obtain restaurant equipment without paying for it all upfront.

      An appealing aspect of restaurant equipment financing: the equipment being financed serves as collateral, so borrowers don’t have to sign over other assets as collateral.

      How Does Restaurant Equipment Financing Work?

      interior restaurant showing equipment dinerTo apply for restaurant equipment financing, you must identify first what sort of equipment your restaurant needs—ovens, blenders, ventilation, freezers, refrigerators, and safety equipment, for example. Almost any piece of equipment can be financed, even non-electrical items like food-prep counters.

      Some manufacturers, like Hobart, offer direct financing for their equipment. In other cases, you can decide on the equipment you need and then apply to financiers for the total cost of the purchase.

      If your credit score is relatively high and you have documentation showing that your business generates strong revenue, you can probably qualify for some form of equipment financing. The application process for restaurant equipment financing is not as stringent as other forms of financing, like a term loan from a bank, in part because the restaurant equipment serves as collateral.

      After approval, funds often arrive as soon as 24 hours. You can then buy the needed restaurant equipment with this money. Every month, you’ll pay the same agreed-upon repayment amount—and once the financing is repaid, which usually takes from 1–5 years, you own the equipment.

      Benefits of Restaurant Equipment Financing

      Restaurant equipment financing allows your business to obtain expensive, but necessary, pieces of equipment without paying for it upfront—one of its major benefits. By doing this, you can start earning money using the equipment without it costing a huge chunk of capital all at once.

      Unlike other options, like restaurant equipment leasing, you also own the equipment after the financing is repaid.

      How to Apply for Restaurant Equipment Financing

      You can use financing calculators to estimate your repayment. For example, to finance the purchase of $50,000 worth of equipment, the estimated monthly cost would be about $2,194 over a repayment period of 2 years. This estimate assumes the borrower has been in business for 3 years or more and has a personal credit score of at least 620.

      buying or financing restaurant equipment

      Applying for restaurant equipment financing through a platform like Lendio is easy and free—and it won’t ding your credit score. Through this process, you can compare rates and repayment terms from multiple financiers simply.

      To qualify, your restaurant will typically need to have been in business for at least 12 months and earn $50,000 or more in annual revenue. Financiers often require a credit score of 650 or higher, and people with higher scores can often receive lower interest rates. If your credit score is lower than 650 but you can prove your restaurant has strong cash flow and revenue for the past 3–6 months, you can usually qualify as well.

      After finding out repayment details, you can apply online. You should expect a decision on your application quickly—and borrowers often receive their equipment financing funds in as little as 24 hours.

      Best Restaurant Equipment Financing Options in 2022

      You’ll find many of them on Lendio, an easy-to-access resource for finding many equipment financing options for restaurants, all in one place. You’d have access to 75+ lenders including BSB Leasing, Balboa Capital, and Simmons Bank. These financiers offer financing in amounts ranging from $5,000–$5 million, and all 3 make it very easy to see financing options through Lendio’s platform. Depending on your credit score, interest rates for restaurant equipment financing can be as low as 7.5%, as of March 2022.

      Restaurant Equipment Financing for Bad Credit

      bad credit restaurant financing applicaitonIf your credit score is below 650, you can still qualify for restaurant equipment financing. Financiers will be looking at how long you’ve been in business as well as your restaurant’s revenues and cash flow. While a lower credit score may mean you’re offered financing with higher interest rates, the best pay to proceed is by filling out a free application to see the what financing is available to you.

      FAQs About Restaurant Equipment Financing

      Can I Finance Restaurant Equipment?

      You can finance restaurant equipment of all types and sizes, from walk-in refrigerators to blenders and coffee makers. Restaurant equipment financing for startups and brand-new restaurants can be trickier—a startup loan might be your best option in that situation.

      How to Finance Restaurant Equipment?

      The easiest way to finance restaurant equipment is to fill out a short form with an online platform like Lendio for free and compare rates from various financiers.

      Should I Buy or Lease Equipment for Restaurant Owners?

      Financing-to-own (buying) and leasing could both work for you, but the big drawback to leasing is having to give back the equipment at the lease’s end. If you were to finance the equipment, it would be yours once you’ve paid it off. You could keep it, sell it, or even lease it out if you wanted.

      Either way, having the money to make that choice puts you and your restaurant in a deliciously good position.


      Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.


      About the author
      Barry Eitel

      Barry Eitel has written about business and technology for eight years, including working as a staff writer for Intuit's Small Business Center and as the Business Editor for the Piedmont Post, a weekly newspaper covering the city of Piedmont, California.

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