Restaurant Equipment Financing Playbook

If you're thinking about opening your dream restaurant or upgrading your commercial kitchen equipment, you know how expensive it can get. A single commercial oven can cost anywhere between $1,500 and $15,000+ (depending on type, size, and features), and that's before you factor in refrigeration, prep stations, ventilation, and other restaurant equipment that keeps a kitchen running.

Most restaurant owners don't have that kind of cash flow readily available. And even if they do, tying it all up in equipment isn't always the smartest financial move.

That's where restaurant equipment financing comes in. This playbook breaks down your funding options and how to choose the right one for your restaurant business.

Why Finance Restaurant Equipment?

Paying for restaurant equipment outright might seem like the simplest option, but it's rarely the most practical. Equipment finance gives restaurant owners more flexibility and can actually strengthen their financial positions in many ways.

• Keeps working capital: Cash flow is everything in the restaurant industry. Financing lets you keep money in the bank for payroll, marketing, stock, and those inevitable costs that suddenly pop up.
• Meets your restaurant's needs: Restaurant financing can almost always help you purchase all the equipment needed, with loans/leases covering 80-100% of the full purchase price of machinery.
• Loans are self-secured: The equipment acquired is used as collateral. This means if you default on monthly payments, the lender takes the equipment as reimbursement.
• Potential Section 179 tax benefits: Depending on how your financing is structured, businesses may be able to deduct lease payments or interest rates as an operational expense (within the first year). Speak to your lender to see what applies in your situation.
• Get equipment faster: Waiting months to save up means delaying your opening or running on outdated gear. Financing allows for faster approvals, not when your bank balance is "ready".
• Access better equipment: Spreading monthly payments can help you get higher-quality, more efficient kitchen equipment that would otherwise be out of reach.

6 Restaurant Equipment Financing Options

There are many restaurant equipment leasing options out there, but the best one for you and your business comes down to cash flow, credit score, and how quickly you need to move.

1. Traditional business loan

Banks and credit unions offer lump-sum business loans. They typically have lower interest rates, but approvals can take weeks and require a strong credit score and plenty of paperwork. For established restaurants with time to spare, they can work well. For new startup businesses or urgent purchases, not so much.

2. SBA loans

Supporting small businesses, there are a few government-backed financing options on the market. SBA loans offer low interest rates and flexible structures, with options available for most business types (including restaurants) with funding up to $15 million.

• SBA 7(a) loan: The most popular SBA loan, offering funding up to $15 million with repayment terms of 10-25 years. It can also be used to refinance existing debt, including outstanding equipment/machinery loans.
• SBA 504 loan: Another popular option, this fixed-rate, long-term loan provides financing up to $15 million and is ideal for purchasing major assets such as real estate, machinery, or kitchen equipment.

3. Vendor/Manufacturer financing

As the name suggests, equipment financing from manufacturers is offered directly by the brands that make them. You might find promotional rates or deferred payment deals, but you're locked into that manufacturer's products. If this works for you, no problem. If you want to shop around for the best equipment, this limits your options.

4. Lease-to-own

This financing option lets you lease equipment by paying smaller amounts over time and own the equipment at the end of the term. The tradeoff is that you'll usually pay more overall compared to purchasing outright. It suits restaurant businesses that want to hold cash flow now and aren't too concerned about the overall cost.

5. Buy now; pay later (BNPL)

BNPL options have expanded into B2B purchasing markets. Lenders, like Credit Key, offer fast approvals and flexible payment options such as 4 interest-free installments and extended Net 30 terms up to 12-months. This allows restaurantiers to buy the equipment they need without worrying about down payments or day-to-day expenses.

Read more: The Difference Between Buy Now Pay Later and Equipment Financing

6. Point-of-sale financing

Credit Key is the only solution on the market that provides flexible payment terms at the point of sale for businesses of all sizes. Get instant access to up to $50K and pay it back over 4 interest-free installments or over 12 months with fees starting at 1%/MO. No hidden fees; no hard credit checks. To learn more about how to apply, click here.

Read more: How to Offer Financing to Your Customers

What to Look for When Comparing Financing Options

Not all restaurant equipment financing is created equally. Before you commit, dig into the details of each. Here are a few pointers on what matters most:

• Speed of approval: If you need equipment fast, a 6-week bank application process won't cut it. Look for options that offer faster decisions in hours/days, not weeks.
• Flexible terms: Can you choose a repayment timeline that matches your cash flow? Some financing options lock you into rigid terms, while others let you pick what works for your revenue cycle.
• Total cost: Interest rates get the attention, but they don't show the whole picture. Factor in down payments, late payment penalties, and any hidden charges (e.g., end-of-lease fees). A low rate with high fees can cost more than a slightly higher rate with none.
• Credit requirements: Traditional lenders often require strong personal and business credit. Alternative funding options may be more accessible even if your credit history/score isn't perfect.
• Risk and ownership: Understand what happens if you can't make payments. With leases, you might lose the equipment as collateral. With some loans, personal guarantees put your own assets on the line. Read the fine print and know what you're signing up for.

Keep Your Restaurant Running

Restaurant equipment financing can help you afford the commercial gear you need, but it also keeps your cash flow healthy and positions your business for steady growth without constant financial strain.

The best financing option is the one that fits how your restaurant actually operates. If you need speed and flexibility, point-of-sale solutions like Credit Key can get you moving without the paperwork headaches.

FAQs

What is restaurant equipment financing?

Restaurant equipment financing allows restaurant owners to purchase or upgrade equipment by spreading the cost over time instead of paying upfront.

What are the eligibility requirements for Credit Key?

The eligibility criteria for Credit Key financing are as follows:

• Apply under your own name (must be a US citizen with a Social Security number).
• Be the business owner or an authorized signer.
• Have a minimum credit score of 600.
• Have at least $40,000 annual business revenue.
• Provide your business’s EIN. If you’re a sole proprietor without a federal EIN, state business registration documents are required.
• Have a bank account or debit card set up for repayments.