Because of the high failure rate, there's a really wide range of rates that you could expect to pay if you need to finance or lease your restaurant equipment, which brings us to:. One thing restaurant owners looking for financing often run into online is sketchy calculators that show an "estimate" of what your payments could be to lease kitchen equipment In order to get real numbers, you'll have to fill out a credit application, and the real rates won't be revealed until you're fully "locked in.
If you try it yourself, you'll find that every restaurant equipment leasing calculator on the internet quotes pretty much the same payments:. Those numbers assume finance charges of about 5.
In order to get payments that low, you usually need at least 3 years in business, good credit both business and personal , and a history of strong cash flows and profitability. The truth is, once you add the high failure rates in foodservice to the fact that you don't get very much when you try to sell a repossessed oven - if your credit is really bad, sometimes there is no way to get you approved for leasing no matter what the rates.
Restaurant equipment leasing rates for startups are not likely to be low - because you're asking a financier to take on a lot of risk - although the rules are a little bit different if you're financing a restaurant franchise with a history of success. Note - to find out rates based on your situation, click here. Here are some examples of real payments based on different scenarios:.
While no online resource can show the entire scope of payments given the zillions of variables a real human uses in analyzing a finance deal, those numbers should give you an idea of what it really costs to get financing to buy equipment for a restaurant.
In the past several months, more than one customer has forwarded to me examples of what they thought were approval letters but were actually lease proposals - meaning the customer had not actually been approved for financing.
The reason for the confusion:. These "proposals" had been slyly crafted to appear to be an approval, but had smarmy lawyer talk buried in them to twist everything around so that if the company came back with a payment way higher than the proposal stated which, is usually what happens the company owes money to back out. Do you want to know how they get the money? The last proposal I saw asked for a first and last payment upfront - which is very normal and customary to start an equipment lease - but very not normal for a proposal.
Then, buried in the small print was that if the customer did not go through with the lease, a "reasonable fee" would be kept without any definition of what "reasonable" means How bogus is that? If the leased equipment breaks, does the company you leased it from include repairs in your agreement? When you purchase a new piece of kitchen equipment, it comes with a blank-slate service history. You can rest easy that it is fit for purpose and covered by warranty.
Most commercial kitchen leasing companies provide out-of-the-box solutions, with pre-built units that can be connected to form larger kitchen complexes.
If you have a regular-shaped room in a size that best suits a pre-fabricated kitchen layout, this is fine, but in many cases, it is simply not possible to make a pre-fabricated kitchen fit your available space in a way that optimises production and ensures maximum working room for staff.
Having a trusted company design a bespoke commercial kitchen that perfectly fits your space is the best way to maximise productivity and minimise issues. These include but are not limited to the required insurance, the rental charge per week, month or hour, which equipment is available to lease under the scheme, terms of use for the equipment and so on.
Advance Catering recommends installing a kitchen that has been planned by experts for maximum productivity and minimal downtime. If you decide to lease a commercial kitchen instead of purchasing it outright, here are some important factors to consider:.
We supply the highest quality equipment and provide end-to-end project management, from the FREE initial consultation and survey to ongoing kitchen maintenance and regular servicing. When you lease restaurant equipment, you pay a monthly fee over a period of years — usually three to five.
When the lease term expires, you can return the equipment, trade it for newer equipment by signing a new lease, or arrange a buyout. Your monthly lease payments will be determined by the total cost of the equipment, the length of the lease agreement and your credit score. It may be better to purchase some pieces and lease others. Food storage equipment like freezers and refrigerators are big-ticket items that usually come with long shelf lives.
Although leasing a walk-in freezer would cost significantly less, it can add up. Lease: If you have no other option Buy: If you have the capital or can secure a loan.
Of all the equipment in a professional kitchen, it's the ice machine that's usually down. They are known for being the least-reliable appliances, but they are also a necessity in any restaurant. Warranties are shorter on these pieces — usually no more than five years. Leasing an ice machine is a better choice because it will likely cost you a couple of hundred dollars per month, and the price includes repairs. If you do the math, you end up paying more to lease an ice machine for 24 months than you would if you purchased one, but it may be worth it compared with the hassle of breakdowns and finding a way to get ice for the day.
Many leasing agents work fast to get a working machine in your kitchen as quickly as possible. Lease: To save on hassle and upfront costs Buy: If you have a backup plan when the machine breaks down. You're likely to get a lot of use out of your coffee or espresso machine, so it may be surprising to hear you should lease these appliances.
They have relatively short life spans and warranties. Plus, you can find many leasing agents that will supply the machines if you sign a contract to buy coffee and filters from them. It's a win-win situation for you, because you pay a monthly fee for the coffee you need and get the machine, along with repairs.
Lease: Especially if you can get a contract that includes a backup plan in case of breakdowns Buy: If you're specializing in coffee or espresso. A gas range or stove is a purchase-over-lease decision.
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