How to Finance Restaurant Equipment When You Are Starting Fresh

Opening a restaurant requires substantial equipment investment: commercial cooking equipment, refrigeration, dishwashing, POS systems, and more. For new owners, this capital requirement can seem overwhelming. How do you finance $100,000+ in equipment when you are just starting?

The good news: equipment financing is one of the most accessible forms of business credit because the equipment itself serves as collateral.

What Restaurant Equipment Costs

Typical new equipment prices for a full-service restaurant:

Financing Options for New Operators

Equipment financing for startups typically comes from:

• Equipment loans — Purchase equipment, pay over 3-7 years. Equipment serves as collateral. Approval depends heavily on personal credit.
• Equipment leases — Lower monthly payments, equipment returned at end (or purchased for residual). Easier approval for newer businesses.
• Vendor/dealer financing — Many restaurant equipment dealers offer in-house or arranged financing. Often more flexible with new operators.
• Package deals — Some lenders specialize in financing complete restaurant equipment packages.

Lease vs. Buy Analysis

For each major equipment category, consider:

General guidance: Buy long-lasting equipment you will use for years (refrigeration, cooking equipment). Consider leasing technology that evolves quickly (POS) or equipment with high maintenance needs.

Strategies for Reducing Equipment Costs

Practical approaches to lower your equipment financing need:

• Buy quality used equipment — Restaurant auctions, dealers, and liquidations offer equipment at 30-60% of new. Inspect carefully.
• Prioritize essentials — You can add specialty equipment later. Start with must-haves.
• Negotiate packages — Buying multiple items from one vendor creates negotiating leverage.
• Consider refurbished — Factory refurbished equipment often carries warranties.
• Timing matters — End of quarter/year dealers may be more flexible on price.

Example: Full Kitchen Equipment Package

Scenario: New restaurant owner opening a 75-seat casual dining concept. Personal credit score 690, $30,000 available for down payment on equipment.

Equipment package: $145,000 total — mix of new (cooking, refrigeration) and quality used (prep tables, smallwares).

Financing: Equipment loan from restaurant equipment dealer

• Amount financed: $120,000 (after $25,000 down)
• Rate: 10.9% (good personal credit, new business)
• Term: 5 years
• Monthly payment: $2,600

Alternative considered: 60-month lease at $2,200/month with $1 buyout option — lower payment but $12,000 more in total cost over life.

Decision: Loan chosen because equipment will have significant residual value and owner prefers ownership.

Mistakes to Avoid

Common equipment financing errors:

• Over-buying before opening — Start with essentials, add specialty items after you know what you need.
• Ignoring installation costs — Hood systems, walk-ins, and heavy equipment have significant installation expenses.
• Skipping maintenance planning — Budget for equipment maintenance from day one.
• Financing too short — Match term to useful life. A 3-year loan on a 15-year piece of equipment creates unnecessarily high payments.

Equipment financing for new restaurants is achievable with proper planning and realistic expectations. Strong personal credit, adequate down payment, and clear equipment priorities are the foundation for successful financing.

Liminal can help you compare equipment financing options from multiple lenders. Our marketplace is free, takes about 2 minutes, and shows you offers without impacting your credit score.