Financing Restaurant Equipment

So you have a dream. A dream of opening a restaurant, nothing too flashy, someplace warm and welcoming, with food that tastes like a little bit of heaven. Or perhaps your dream is to take the restaurant you have and update it, renovate it, expand it. Maybe you want to open a little café, a bed and breakfast or your own catering business. These dreams are the stuff of life. We only have one life to live, so go ahead, make that dream come true. However, starting up a new business has risks and costs that can be daunting, particularly when it comes to financing restaurant equipment. Have no fear! There are a variety of terrific options that can help move your dreams forward in very practical terms. 

Research First

Research always pays off.  In consultation with your chef and kitchen staff, make a list of your wants and needs. Prioritize. Then research and cost every item on your list. The Restaurant Canada website is a great place to start, with a buyers guide for everything from cutting boards to rotisseries. Consult independent on-line reviews. Ask colleagues for recommendations. Major appliances such as ovens, stove tops, fryers and dishwashers are going to be the backbone of a successful working kitchen, so they need to be equipped to stand up to the beating they will inevitably get. Once you have compiled a list of equipment and costs, open up Excel, start a new spreadsheet and crunch some numbers. 

Financing Options

Unless you have investors with deep pockets, buying restaurant equipment outright is probably not an option. Often, the first place people look to for a loan is the big banks, but they are not always the best option. Banks tend to be conservative, often charging higher fees for start-ups that potentially pose some risk. Better to find a financier that specializes in restaurant financing and understands the ins and outs of the business. 
Leasing equipment can be an excellent option if you know what equipment you want. A lease involves a longer contract for a lower rate. Rates are dependent on variables such as the length of the term and how new the business is.  Once the terms are approved by both parties, the restaurant finance company will buy the equipment needed and lease it back to the client. There may also be an option for lease to own. 
If you are unsure about a particular piece of equipment and you don’t want to commit to a long term contract, renting might be the option that works best. While renting can be more expensive, there are no penalties for buying out or terminating the contract. Renting is also 100% tax deductible. 

If you already have an established business but need additional funds, a working capital loan can give you money to spend as you choose, at surprisingly reasonable rates. 
Financing restaurant equipment doesn’t need to be a scary affair. Speak to an expert who knows the industry and can provide a variety of options, customized to your particular needs. 

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