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Restaurant Equipment Financing Start Up
It’s not easy to make any new business a success story, but getting a restaurant off the ground and into the black is especially scary. Between the long hours, lunch and dinner, and staffing requirements, you’ll probably have your hands full planning the logistics of your business. But before you start cranking out metric tons of food, you need commercial kitchen equipment.
Restaurant Equipment Financing & Leasing
Unless you are wealthy, most restaurant owners should look into restaurant equipment leases and/or loans to purchase the ovens, ice machines, and grills you need. Don’t let your business suffer for lack of the right commercial kitchen equipment. With the right financing, that reach-in freezer can be yours!
When you start your restaurant, you probably don’t have time to independently research every vendor out there to determine their compatibility. Why not leave that part to us? Here are some solid equipment financing options.
Lendio is a business financing aggregator — the company matches customers with the right financing from its network of over 75 business funders.
Currency (formerly Currency Capital) is an aggregator of equipment financing offers for restaurant owners. The currency lender network is quite welcoming to new businesses. The Currency network offers equipment rentals as well as loans.
Best Restaurant Equipment Financing Options Of April 2023
Crest Capital offers equipment financing directly, not through a network of affiliated companies. Crest prides itself on openness and transparency, and its website has more information on its products than many retailers.
Direct Capital is an equipment financer for more established restaurants. You must have at least two years worth of business history, a credit score of at least 680, and monthly income of at least $100K to qualify.
ELease is primarily for businesses looking to own their equipment; most of their leases are equipment finance agreements (EFAs) and last between two to four years. Along with EFAs, eLease offers $1 purchase and fair value market leases.
Lendio is a business financing aggregator — the company matches customers with the right financing from its network of more than 75 business funders. You tell Lendio who you are and what you’re looking for, and Lendio gives you offers that fit your needs, saving you the work of finding financing yourself. Lendio will run a soft credit check on you during this process, but it will not affect your credit score. According to Lendio’s customer service agreement, the process of presenting you with offers should not exceed 72 hours. Lendio’s partners offer a variety of business financing, including equipment leasing.
Restaurant Equipment Reviews And Advice
To apply for equipment leasing, Lendio requires that you have six months of business history behind you, a credit score of 550, and an income stream of $10K/month. These requirements are less onerous than many equipment rental vendors. Additionally, while many equipment loans require you to make a down payment, most of Lendio’s partners do not.
Origination fees will depend on the lessor you match, while interest rates start at 2%. Borrowing amounts run from $2K to $5 million.
With Lendio’s relatively affordable requirements, highly rated customer support, and easy application process, Lendio is a great resource for small and large restaurants.
Currency (formerly Currency Capital) is another aggregator of equipment financing offers for restaurant owners. Like Lendio, the Currency lender network is quite accommodating to new businesses. However, unlike Lendio, the Currency network offers equipment rentals as well as loans.
The Best Restaurant Business Loans For 2023
The currency requires that you have a credit score of at least 585, six months or more of business history, and a revenue stream of $75K/year.
Currency loans range from $5K to $2 million. Interest rates vary depending on the lender you match with but range from 6% to 24%. Original fees range from 0% to 5%, with other fees depending on the lender and your risk level. You may also be required to pay a down payment.
You must not have a recent bankruptcy to qualify for equipment financing through the Currency platform. Plus, the funding process can take a week or two, so it’s not the easiest game in town.
Currency primarily serves small and medium-sized businesses, so if your restaurant meets the revenue stream requirements and you don’t need fast funding, check out Currency. Unfortunately, Currency reveals nothing on its website about the nature of its loans and leases.
The Essential Restaurant Equipment Guide
Unlike the previous two options listed here, Crest Capital offers direct equipment financing, not through a network of affiliated companies. Crest prides itself on openness and transparency, and its website has more information on its products than many retailers.
Crest equipment leases (no loans offered) require you to have at least 24 months of business history under your belt, so this is not a financing option for young restaurants. You will also need a credit score of 650 or higher. Funding is offered in amounts between $5K and $500K, term lengths from 24 to 72 months, and interest rates start at 5%. Just be aware that Crest charges a $275 administration fee on top of your other fees.
Crest’s offers should suit more mature restaurants, but the credit and hours-in-business requirements make Crest’s leases less suitable for younger restaurants and owners. his with little credit.
Direct Capital is another equipment financer for more established restaurants. You must have at least two years worth of business history, a credit score of at least 680, and monthly income of at least $100K to qualify. Loan amounts run up to $500K, terms range from 6 to 72 months, and interest rates start at 5.49%.
Budget Food Equipment
Direct Capital doesn’t offer as many leasing options as Crest, but they do offer the basics in the form of a $1 purchase lease, fair market value lease, and terms of net. This funder also provides working capital loans. Expect to pay between a 0%-5% origination fee as well as any fees related to shipping and handling.
ELease is an online seller of equipment financing, offering both lease and loan-like equipment investment agreements (EFA). Unfortunately, eLease does not post specific borrower instructions. However, eLease expresses its willingness to work with new businesses and even companies with recent bankruptcy.
ELease is primarily for businesses looking to own their equipment; most of their leases are equipment finance agreements (EFAs) and last between two to four years. Along with EFAs, eLease offers $1 purchase and fair value market leases. Expect to pay an administrative fee as well as your first and last month’s payment up front.
Financing amounts run from $3K to $500K, term lengths from 2 to 5 years, and interest rates from 4% to 35%.
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ELease is a versatile financer that offers potentially competitive rates. However, relatively few user reviews of the company exist, so keep in mind that the company’s reputation is not well established.
It’s easy to get overwhelmed by the number of financing options available to a potential borrower or renter. Consider whether you are looking to own or buy equipment. Is it something you will use 10 years from now, or will you try to sell it in three? Do you want the asset to appear on your books for tax purposes, or do you want it to be treated as an operating expense?
When considering your equipment investment options, it’s important to fully understand your options. While equipment loans work like any other type of loan, equipment leases have an additional explanation. With an equipment lease, you pay a fee to borrow the equipment from the lessee (the leasing company) as opposed to paying a loan to purchase the equipment. At the end of your lease, you generally must return the equipment to the lessor, although you may be offered the option to purchase the equipment after your lease term ends.
However, leases have some disadvantages relative to loans as well. Leases tend to carry more interest than loans, so you may end up paying more for your equipment overall than with a loan.
Three Great Options For Restaurant Financing
Knowing what type of lease (or loan) you are looking for will help you narrow down your list of potential lenders. Fortunately, finding companies that offer equipment financing is not difficult. In addition, most equipment financers are willing to finance kitchen equipment. More challenging is finding a financer that:
Yes, you must go through a credit check (hopefully a soft one) during the application process. And while equipment investors usually have time-in-business and income requirements as well, some companies may bend to these requirements if you have good-to-good credit and finances.
If you want to own restaurant equipment for a long time – unless you can buy it with cash – you’re looking at one of two categories: loans and leases.
Equipment loans work similarly to other types of medium-to-long-term loans, with some caveats. The asset, in the case of equipment loans, will serve as
Equipment Leasing For Small Business Owners
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