Restaurant equipment, financed the way kitchens actually get built
Equipment is one of the biggest line items in any restaurant opening, and one of the most painful surprises when something fails mid-service. Restaurant equipment financing lets you pay for it over time, with the equipment as collateral, so your cash stays available for the costs lenders will not finance: payroll, inventory, marketing and the months before a new location breaks even.
This page focuses on what restaurants finance and how to plan it. For loan and lease mechanics across all hospitality businesses, see equipment financing.
What restaurants finance
Cooking line: ranges, charbroilers, griddles, fryers, combi and convection ovens, pizza ovens, salamanders, steam kettles and tilt skillets.
Ventilation and safety: exhaust hoods, make-up air units and fire-suppression systems. These are often among the most expensive items and are tied to building and fire codes.
Refrigeration: walk-in coolers and freezers, reach-ins, prep tables, ice machines and blast chillers.
Warewashing and sanitation: dish machines, three-compartment sinks, grease interceptors and hand sinks.
Prep and storage: mixers, slicers, food processors, shelving and holding cabinets.
Front of house and bar: POS terminals and kitchen display systems, furniture, draft and glycol systems, back-bar refrigeration and sound.
Planning an equipment package for a new location
- Start from the menu. The menu determines the line, and the line determines the hood length, utility loads and refrigeration needs.
- Check the space. Second-generation restaurant spaces may have a usable hood and walk-in; cold shells need everything. Your contractor and equipment dealer should walk the site together.
- Get itemized quotes. Separate equipment from delivery, installation, electrical and plumbing. Lenders finance equipment more readily than soft costs.
- Decide new vs used item by item. Used refrigeration and stainless can save money; specialized or warranty-sensitive items may be better new.
- Line up financing before you order. Equipment lead times can be long, and some vendors require deposits. Approval before ordering keeps the opening on schedule.
Loan, lease or bundle into a bigger loan
- Equipment loan: you own it, the lender holds a lien. Best for equipment you will use for its full life.
- Lease: lower payments and the option to upgrade or return. Common for POS and technology.
- Bundle into an SBA or expansion loan: equipment can be part of an SBA loan or expansion loan for a new location. Separate equipment financing can keep the main loan smaller and preserve borrowing capacity.
Section 179 and depreciation can affect which option makes sense for you. That is a question for your CPA.
What lenders look at
Operating restaurants applying for smaller amounts often need only an application, recent bank statements and the equipment quote. Larger packages add financial statements and tax returns. Newer restaurants can often still finance equipment because the equipment secures the deal, though down payments and terms may differ. See startup restaurant loans for first-time owners.
Equipment in Colorado and Tennessee kitchens
Local codes shape equipment budgets. In Colorado, Denver and other Front Range cities apply building, fire and health codes that drive hood, make-up air and grease interceptor requirements, and older buildings in neighborhoods like LoDo and Old Town Fort Collins can add retrofit costs. High altitude affects some cooking and baking equipment, which is worth discussing with your dealer. In Tennessee, Metro Nashville, Shelby County and other local health departments review kitchen plans, and summer heat and humidity put extra load on refrigeration and make-up air systems.
Fast-growing suburbs in both states, from Aurora and Thornton to Smyrna and Spring Hill, see a steady stream of new kitchens. See also restaurant loans in Denver and restaurant loans in Memphis.
When equipment fails mid-service
A dead walk-in or a failed dish machine costs sales every day it is down. If you need emergency replacement, send us the vendor quote and your recent statements. Equipment lenders can often move quickly for operating restaurants, and having a broker who already knows your file saves time when it matters.
Questions owners ask
Can I finance used restaurant equipment?
Yes. Many lenders finance used commercial kitchen equipment, especially items with strong resale value like refrigeration, ranges and stainless prep tables. Terms may be shorter than for new equipment, and some lenders prefer purchases from dealers over private sellers. Get an itemized quote or invoice showing the make, model, age and condition.
Should I lease or finance kitchen equipment?
Finance equipment you will keep for its full life, such as walk-ins, hoods and ranges. Consider leasing for items that become outdated quickly, like POS systems, or when you want lower payments and upgrade options. Compare total cost over the full term, and ask your accountant how each option affects your taxes.
What credit is needed for restaurant equipment financing?
Requirements vary by lender. Because the equipment serves as collateral, equipment financing often accepts a wider credit range than unsecured loans. Stronger credit and longer time in business bring better terms and more lender choices. Lower scores may mean a larger down payment or shorter term rather than an automatic decline.
Can installation costs be bundled in?
Often, partially. Many lenders allow some delivery, installation and related electrical or plumbing work, but they cap soft costs because they have no resale value. Ask your dealer for a quote that separates equipment from installation, and confirm what the lender will cover before you sign the vendor contract.