Now that you’ve gone through all the motions of obtaining your restaurant, it’s time to start shopping for restaurant equipment. But how do you finance all of these large expenses? There are several ways in which a business owner can buy kitchen equipment for their new restaurant. But first, there are a few questions you’ll have to think about first.
For starters, how much money do you need? Are you planning on purchasing new equipment, or are you okay with purchasing appliances or prep tables that are gently used? Are you looking into getting a loan? The type of financing you need will all be dependent on the answers to these questions. So, it’s important to evaluate your needs first. Then, you can consider a few of the restaurant equipment financing options below.
Lease your restaurant equipment.
When it comes to restaurant equipment financing, some business owners don’t realize that they don’t have to purchase the equipment outright. In fact, a lot of restaurant owners consider leasing because it helps them save a lot more money. Opening up a restaurant has a lot of upfront costs, and leasing ensures positive cash flow because monthly payments are low. You can lease each piece of equipment without having to commit to the full purchase price. The Restaurant Warehouse offers equipment lease options that are affordable. You don’t need a high credit score to qualify for low lease payments. Plus, you only pay for the type of equipment you lease instead of having to pay off an entire loan. It’s a good option for any restaurant business regardless of whether they’re a startup or already established.
Use a credit card.
Kitchen equipment costs a lot of money. With upfront costs already being high, you may not have the cash to pay for restaurant equipment right away. As a business owner, you’re probably looking to pay with a credit card. You’ll already have an account dedicated to your business expenses, so it’s only natural to want to use a credit card to finance kitchen equipment. The issue with using a credit card is that you’ll rack up a huge balance. And if you aren’t able to meet your revenue goals when the business opens, you’ll start racking up interest. Credit cards tend to have very high interest rates. Think about everything you’ll have to purchase: refrigerators, stoves, prep tables, freezers, and more. Even with good credit, racking up these expenses as a business owner can be overwhelming. It may be easier to consider other financing solutions.
Get a business loan.
As a restaurant owner, you’re likely familiar with loans. There are some advantages and disadvantages. One of the biggest disadvantages is that qualifications tend to be difficult. You’ll need good credit history, for starters. Another hurdle is the fact that business loans may require you to pay most of the bulk of the principal by the end of the loan. On top of that, restaurant equipment loans and bank loans are usually only available for a specific amount of time. Plus, if your equipment ever needs a warranty, the life of your kitchen equipment typically exceeds the term loan. If you plan on obtaining a bank loan for your restaurant equipment financing, make sure that you can handle the repayment terms within the given time period.
When it comes to paying for restaurant equipment, it’s rare for a business owner to be able to shell out cash. Some of the most common financing options include a business loan, paying with credit, or leasing new restaurant equipment. Leasing from a site like The Restaurant Warehouse tends to have a lot of benefits. It costs less than purchasing equipment outright, and you only have to pay the exact amount for what you use. Best of all, lease terms are flexible and fast. Make sure to incorporate a good restaurant equipment financing option into your business plan!
