Hospitality equipment finance supports businesses in the food, beverage, and accommodation industries by providing tailored financial solutions to help them grow and operate efficiently. With the high costs often associated with setting up or upgrading a commercial kitchen or venue, financing enables hospitality operators to access the tools they need without large upfront investments. This approach helps preserve working capital, manage cash flow, and maintain flexibility in an industry that demands both consistency and innovation
Common Financing Options for Hospitality Equipment
Rental / Operating Lease
The business rents the equipment for a specified period without and has a range of options at the end of term such as ownership. This is ideal for all types of equipment.
Finance Lease
The business makes payments over a longer term with an option to purchase the equipment at the end of the lease. The equipment is recorded as an asset on the balance sheet.
Hire Purchase
The business makes an initial deposit and then pays fixed installments over time. Ownership of the equipment is transferred once all payments are completed. This option is suitable for businesses looking to eventually own the equipment.
Equipment Loans
A traditional loan is provided to purchase the equipment outright. The loan is repaid over time with interest, and the business owns the equipment immediately.
Vendor Financing
Some equipment suppliers offer in-house financing options. This can simplify the purchase process and may come with benefits like lower interest rates or bundled maintenance services.
Line of Credit
A revolving line of credit specifically for equipment purchases. This offers flexibility, allowing businesses to draw funds as needed and pay interest only on the borrowed amount.
Benefits of Hospitality Equipment Finance
- Cash Flow Management: Spreads the cost of expensive equipment over time, helping businesses maintain cash flow for other operational needs.
- Tax Advantages: Depending on the financing structure, payments may be tax-deductible, and certain equipment may qualify for accelerated depreciation under Australian tax laws.
- Flexibility: Leasing options provide the flexibility to upgrade to newer models as technology advances, ensuring businesses remain competitive and efficient.
- Preservation of Capital: Financing allows businesses to acquire necessary equipment without depleting capital reserves, leaving funds available for other investments or emergencies.
Considerations
- Payments Rates and Fees: Compare different financing options to understand the total cost, including interest rates, fees, and any additional charges.
- Term Length: Ensure the financing term aligns with the expected useful life of the equipment and the business’s cash flow cycle.
- Maintenance and Repairs: Consider whether maintenance and repair services are included in the financing agreement. This can reduce downtime and unexpected costs.
- Residual Value: In leasing agreements, understand the equipment’s residual value at the end of the lease term and any purchase options available.
Types of hospitality equipment
Commercial Kitchen Equipment
- Ovens (Combi, Convection, Deck)
- Grills, Griddles & Fryers
- Cooktops & Ranges
- Steamers & Broilers
- Salamanders & Toasters
Refrigeration & Cold Storage
- Upright Fridges & Freezers
- Under bench Refrigerators
- Cool Rooms & Freezer Rooms
- Display Fridges & Cake Displays
- Ice Machines
Washing & Sanitation
- Commercial Dishwashers & Glasswashers
- Pot & Pan Washers
Food Preparation Equipment
- Mixers (Planetary, Spiral)
- Slicers, Dicers & Food Processors
- Blenders & Juicers
- Meat Grinders & Tenderisers
- Dough Rollers & Dividers
Beverage & Café Equipment
- Commercial Coffee Machines & Grinders
Front-of-House & Fit-Out
- POS Systems & EFTPOS Terminals
- Display Cabinets & Warmers
- Furniture (Tables, Chairs, Booths)
Australian Financing Resources
- Financial Institutions: Major banks and financial institutions in Australia may offer financing options for hospitality equipment.
- Equipment Finance Brokers: Specialized brokers can help businesses find the best financing options tailored to their needs and financial situation.
- Government Programs: Occasionally, there may be government grants or incentives available for specific types of equipment or for businesses in certain regions.