Catering and restaurant equipment finance for commercial kitchens

Commercial kitchen equipment finance lets restaurants, cafés, hotels, takeaways, bakeries, caterers and dark kitchens spread the cost of ovens, refrigeration, extraction, dishwashers and full kitchen fit-outs over fixed monthly payments. The main options are hire purchase, leasing and asset refinance, and new or used equipment can usually be funded. It keeps cash free for wages, stock and rent. Smart Funding Solutions approaches asset finance lenders that understand catering equipment, including specialists who consider used kit and start-ups. For the wider picture, see our hospitality business loans hub.

For single items outside the kitchen, see coffee machine finance and commercial refrigeration and cold room finance.

01Why hospitality businesses finance kitchen equipment

A working kitchen needs several high-value items before you can trade, and they often need replacing at short notice. Paying outright can drain the reserves you need for everything else. Finance helps you:

• protect working capital for payroll, suppliers and seasonal dips
• budget with fixed payments that fit around weekly takings
• buy better equipment, which can be more reliable and energy-efficient
• replace breakdowns quickly without waiting to save up
• fund a whole fit-out across several suppliers in one agreement

02What equipment you can finance

Cooking equipment

Combi ovens, conventional ovens, ranges, grills, fryers, pizza ovens and induction suites. Combi ovens are among the most commonly financed items because of their cost and central role in service.

Refrigeration and cold storage

Upright and under-counter fridges, freezers, blast chillers, prep counters and walk-in cold rooms, all essential for food safety.

Extraction and ventilation

Canopies, ductwork and extraction systems are often a large part of a fit-out budget and are needed to meet safety requirements.

Warewashing and preparation

Dishwashers, glasswashers, mixers, slicers, benches and prep stations.

Complete kitchen fit-outs

Many lenders will fund a full package, sometimes including installation, front-of-house furniture and EPOS systems. For wider premises works, see our guide to financing a restaurant fit-out.

Franchisees often fund approved equipment the same way; our guide to how much a Subway franchise costs and how to finance it shows where equipment finance fits in a franchise budget.

Frying ranges are a large single purchase with their own lender questions; see fish and chip shop finance for a worked example of a £40,000 range over five years.

03Restaurant equipment finance

Restaurant equipment finance applies the same tools to a restaurant's whole fit-out, from the cookline and cold rooms to the bar, tables, chairs, tills and EPOS. Most restaurants fund the kitchen on hire purchase so they own it at the end, and lease the items that date quickly, such as EPOS, coffee machines and screens. A single agreement can usually cover several suppliers, which keeps one monthly payment for the whole opening or refit.

Lenders assess restaurant equipment finance on the supplier quote, your bank and card statements and your experience in hospitality. A new opening can often be considered where the owners have run a kitchen before, though a deposit or personal guarantee may be asked for. If the equipment is only part of the spend, our page on restaurant business loans covers unsecured loans and card takings advances for the rest, and our guide to getting a loan to start a restaurant sets out a full opening budget. Coffee shops can compare the same choices in our cafe business loans guide.

Combi ovens, conventional ovens, ranges, grills, fryers, pizza ovens and induction suites.

04Catering equipment finance

Catering equipment finance covers the same kit for businesses that cook away from a restaurant floor, including contract caterers, event and wedding caterers, school and care home kitchens, bakeries, dark kitchens and mobile caterers. Lenders look at the contracts or bookings behind the income as well as bank statements, so a caterer with signed contracts or a steady events diary can often fund more than its accounts alone suggest. Mobile caterers can fund the trailer or van and its kit together; see food truck finance. Two real examples are two facilities for a catering business and new kitchen equipment and working capital for a community venue.

05Kitchen equipment leasing

Kitchen equipment leasing lets you use the kit for a fixed term without buying it. With a finance lease you take on most of the risks and rewards of the equipment and pay rentals that cover nearly all its cost, while an operating lease covers only part of the cost and the lessor takes the equipment back at the end. VAT is charged on each rental rather than up front, which helps a new kitchen's cash flow, and some leases bundle in servicing. At the end you can usually keep renting, hand the kit back or upgrade, so leasing suits items that date or wear quickly. If you want to own the equipment, compare hire purchase, and if you buy, the Annual Investment Allowance may apply. Gas appliances must be installed and checked by an engineer on the Gas Safe Register, and lenders often ask for the certificate before paying the supplier.

06Kitchen equipment finance by type of business

• Restaurant business loans for refits, second sites and quiet months
• Pub loans and pub finance for pub kitchens, cellars and refurbishments
• Takeaway business loans for delivery and collection kitchens
• Fish and chip shop finance for frying ranges
• Hotel finance for hotel and banqueting kitchens
• Getting a loan to start a restaurant for a full opening budget

07Finance options explained

Hire purchase

You pay a deposit and fixed monthly instalments. The lender owns the equipment until the final payment, when ownership passes to you. Hire purchase suits items you plan to keep for their full working life, and you may be able to claim capital allowances.

Leasing

You rent the equipment for an agreed term without owning it. Leasing usually means a lower up-front cost, VAT charged on each rental rather than in one go, and rentals that are generally treated as a business expense. At the end, you may be able to continue renting, return the equipment or upgrade.

Asset refinance

If you already own valuable equipment, asset refinancing can release cash tied up in it while you keep using it. A variation, sale and hire purchase back, lets you raise funds against the asset and regain ownership once repaid.

Tax treatment depends on your circumstances, so check with your accountant.

These structures are used for vans, machinery and IT as well as kitchens; our page on asset finance loans and leases sets out how each works and how providers differ.

08Budgeting a kitchen: costs people miss

• Installation and commissioning: gas connections, electrical work and commissioning can add noticeably to the equipment price. Ask whether the lender will include them in the agreement.
• Extraction and gas safety: extraction needs to be suitable for your cooking, and gas appliances need a qualified engineer. Build these into the quote rather than finding out at the end.
• Fixed items in rented premises: equipment bolted into the building, such as canopies and cold rooms, can be harder to repossess, so some lenders treat it more cautiously. Check your lease on alterations and landlord consent.
• Maintenance: hire purchase does not usually include servicing. Budget for service contracts, or ask whether a lease includes them.
• Used equipment: check there is no outstanding finance on second-hand kit and get a proper invoice from the seller.

09What lenders look at

• the equipment, its supplier and whether it is new or used
• your trading history and experience in hospitality
• business and personal credit history
• affordability, usually shown by recent bank statements
• filed accounts or management figures for limited companies

New businesses can often be considered, particularly where the owners have relevant experience, though a deposit or personal guarantee may be requested.

10How to apply

1. Choose your equipment and get a supplier quote.
2. Gather documents: business and director details, recent bank statements and accounts where available.
3. Decide your preferences: term, deposit and whether you want to own the equipment.
4. Compare offers, including the total amount repayable, fees and end-of-term options.
5. Sign and install: once approved, the lender usually pays the supplier directly.

Decisions can come within a few working days once a lender has everything it needs, with funds following shortly after signing.

11Alternatives to consider

If you need funds for more than equipment, a restaurant business loan or wider hospitality business loan may suit, and card-heavy businesses sometimes use a merchant cash advance. For equipment outside the kitchen, see our wider equipment finance page. We are a broker, not a lender, so we compare options and lenders make the decisions.