Hospitality and catering equipment finance

How do restaurants and caterers finance kitchen equipment?

Restaurants, bakeries, hotels and contract caterers typically use hire purchase for ovens and durable kitchen equipment they intend to keep for years, and lean towards leasing for equipment where technology moves faster, such as combi ovens and EPOS systems. Kitchen equipment is rarely bought alone, arriving instead as part of a fit-out where the total cost runs well beyond normal cash reserves and is usually needed before the doors open or a refurbishment is finished, which is why financing is the norm across this category.

Buyers are restaurants, cafes, bakeries, hotels and contract caterers, most often financing a fit-out for a new site or a refurbishment of an existing one. Kitchen equipment is almost never bought as a single item, arriving instead as part of a package that includes ovens, refrigeration, prep equipment and often EPOS and payment systems, and the total cost of that package typically runs well beyond what a hospitality business holds in cash reserves, particularly against a fixed opening date.

Hire purchase suits ovens and durable kitchen equipment well, since this kind of kit is expected to run for many years and an operator generally wants to own it outright once paid for. Leasing is a better fit for equipment where technology changes faster, such as combi ovens with evolving cooking programmes, and EPOS or kitchen management systems, which are tied closely to software that is updated far more often than the hardware itself would need replacing.

Commercial kitchen equipment from established manufacturers has a healthy used market among other operators, since well-maintained equipment like this remains genuinely usable for a long time, which gives lenders confidence in the security. Bespoke joinery and installation work carried out as part of a fit-out has no resale value of its own once installed, so it is financed differently and lenders will generally lean on the equipment itself for security.

The mistake we see most often is financing the kitchen equipment but treating gas connection, electrical work and extraction as a separate cash cost, when these can often be included on the same supplier invoice and financed together with the equipment itself. Confirming this before ordering avoids an unplanned cash requirement right at the point the business can least afford it, immediately before opening. It is worth asking the kitchen designer or installer to itemise these costs on the same quote as the equipment from the outset.

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