Finimpact

FAQs about Restaurant Equipment Financing

What’s the difference between restaurant equipment financing and leasing?
Financing restaurant equipment means taking out a loan to purchase the equipment. Once you repay the loan, you own the equipment fully and are free to keep using it or sell it.
With a lease, you’re renting the equipment from someone else. When the lease ends, you have to return the equipment unless you have a purchase clause in the contract.

Should I buy or lease restaurant equipment?
Buying and leasing restraint equipment both have pros and cons.

Buying is more expensive than leasing. You’re also fully responsible for maintaining and repairing the equipment. However, financing means you’ll build equity and eventually own the equipment, letting you use it without a monthly financing cost.

Leasing is usually cheaper on a monthly basis. You might also not have full responsibility for repairs and maintenance. The fact that you don’t own the equipment also makes replacing and upgrading easier. However, with a lease, you’ll never pay off the equipment, so you’ll always have to deal with the monthly payment.
Is restaurant equipment financing available for startups?
Yes, there are restaurant equipment financing options for startups. However, you’ll likely have to pay higher interest rates and almost certainly will have to provide a personal guarantee that you’ll repay the loan.

Conclusion

Restaurant equipment financing is a great way for restaurant owners to outfit their businesses with new equipment or to fund expansion without having to have huge amounts of cash on hand. When you’re considering financing options, be sure to compare the rates and fees to find the best loan for your company.

About the Author

TJ Porter

TJ Porter

Personal Finance Writer

I have in-depth experience in reviewing financial products such as savings accounts, credit cards, and brokerages, writing how-tos, and answering financial questions both simple and complicated.

More about me

Related Articles