Restaurant equipment loans are a valuable way to get your business off the ground, even without the capital to purchase your equipment outright. Even with no credit, the equipment can act as collateral for itself.
Commercial restaurant equipment financing is a common way for restauranteurs to get ahead in their business when they’re just starting out or struggling with a slow season. A monthly payment is much more manageable than paying the whole sum at once.
Make sure you gather all of the necessary documents before applying for commercial equipment loans and research what kind of equipment you will need to finance. This will significantly speed up the process and get your restaurant in business faster!
5 Tips For Buying New Restaurant Equipment
There are many factors that go into buying new restaurant equipment, like equipment finance, but the first thing to think about is what you really need. Make sure you plan out your restaurant’s menu before you purchase anything.
After you’ve planned out the menu, you can go through and list all the equipment you will need. Take the size of your kitchen into consideration, as well as the number of people who will be working in it. You want your kitchen functional and efficient, not crowded, and difficult to navigate.
Think about all of the long-term costs the equipment will require. A higher-quality piece of equipment will obviously last you longer and are worthy of considering commercial equipment loans.
It’s also helpful to consider a National Sanitation Foundation certification. Most high-quality equipment will carry an NSF certification, and you’ll know that you are using and serving the safest and cleanest equipment for your customers.
One thing that may cost you in the short term but benefit you in the long run is buying energy-efficient equipment. They may be pricier upfront but will provide you savings monthly in utility bills like energy and water.
When your equipment arrives, be sure to inspect it! You should also familiarize yourself with the warranties (or lack thereof). This can save you a lot of money upfront, and neglecting to go over your equipment immediately could line you up for unwanted maintenance fees later.
Should You Buy New Equipment With Cash?
When it comes to choosing your equipment, new isn’t always better. Especially if you are on a tight budget, going for used equipment can save you lots of money without taking a significant hit on quality. Restaurant equipment is built to last, so a bit of pre-use isn’t a big deal.
Try looking into auctions and estate sales for used restaurant equipment. They can be a great place to find everything from plates and chairs to gas ranges and cookware, all for just a few pennies on the dollar.
Especially when you are first starting out, restaurant equipment collateral loans can be advantageous in place of outright purchasing your necessary items. You may even still have warranty coverage if the equipment is not too old.
If you have decided to become a restaurant owner and buy new restaurant equipment, buy now pay later. Look into your financing options — you’ll own the equipment at the end of the agreement and have time to build up capital while your restaurant is up and running.
How Do I Get An Equipment Loan With Bad Credit?
Restaurant equipment financing with bad credit is more complex than with good credit, but it can still be done. Most lenders have a particular credit score that you need to achieve in order to qualify for a restaurant loan, which can vary. In some cases, you can rent your own restaurant equipment with no credit check.
Since you are leasing a physical object, that’s easy collateral for lenders to work with. Also, it can help your loan application to have other examples that you are not a risky investment. It can be anything from a steady yearly income to your restaurant’s credentials.
So while it can be done, make sure you are ready to prove yourself more than those with good credit. Though this is a safer situation for lenders, they will still want to protect themselves from losing out on a return.
What’s The Difference Between Restaurant Equipment Financing and Leasing?
There is a slight difference between financing and leasing that you should keep in mind. Restaurant equipment for lease is still the lender’s property, and financed restaurant equipment is your own property that you will own after paying it all off.
Just remember that owning a piece of equipment at the end of your financing isn’t always a positive since technology is always moving forward. Depending on the length of the financing period, your equipment may be outdated, and leasing would have been a better option.
On the other hand, if you are looking at a staple piece of equipment that is unlikely to be replaced for a very long time, you may want to finance it rather than leasing it. That way, you will own the piece of equipment at the end and won’t need to pay another leasing period.
Financing and loans for your restaurant equipment are the ideal solutions for any new business owner or if you are struggling with a slower season. Save money upfront and work out a monthly payment plan that fits your capital flow best.
And before you look into financing a whole new range of equipment for your restaurant, make sure you look into used options first. Used equipment can be a huge money-saver. Restaurant equipment is much like a car — it depreciates in value immediately after purchase.
The bottom line is that loans and financing are an increasingly common tool for restaurant and small business owners all over the country and can easily be utilized to make equipment affordable and accessible.
So make sure you do your research, make a list of your needs, and go into this venture organized. Once you have everything planned out and your paperwork in order, you’re ready to apply for the loan. You’ll be up and running soon!
About the Author, Madison Taylor
Madison Taylor is the Brand Ambassador at ROK Financial. She is responsible for raising brand awareness and business relationships with business owners across the country. Madison loves that she plays a small role in getting Business Back To Business Through Simple Business Financing and looks forward to hearing what you think about the blogs she creates! Madison has been working in the financial space for six years, and loves it! When she is not at work, you will find her at home learning a new recipe to test out on her family or going on new adventures with her friends.