Restaurant Equipment Financing: 5 Options to Consider

Restaurant equipment financing lets operators acquire equipment through loans or leases instead of paying the entire purchase price upfront. It can help you replace a broken refrigerator, upgrade an oven, or equip a new kitchen while keeping cash available for everyday expenses.

You don’t necessarily need an equipment-specific loan, either. Some business loans, including loans available through Toast Capital, can fund equipment alongside other restaurant needs.¹ The important question is whether the financing fits both the purchase and what your business can repay.

This guide explains your options, what they cost, what lenders look for, and how to compare offers.

Key takeaways

• Restaurant equipment financing can spread purchase costs over time while preserving cash for daily expenses.

• Loans and leases differ in ownership, repayment terms, and end-of-contract obligations.

• Compare total repayment, fees, and payment schedules—not just the advertised payment.

• Match financing to the equipment’s useful life and what your restaurant can repay during slower periods.

What can restaurant equipment financing cover?

Financing may cover a single replacement or a larger package of restaurant kitchen equipment. Start with what your operation needs, then separate essential purchases from upgrades that can wait.

• Cooking equipment: Ovens, ranges, fryers, grills, and ventilation equipment.

• Refrigeration: Walk-ins, reach-ins, freezers, and ice machines.

• Preparation and cleaning: Mixers, slicers, prep stations, and commercial dishwashers.

• Service equipment: Beverage systems, furniture, and POS hardware, depending on the program.

• Related expenses: Delivery, installation, taxes, and electrical or plumbing work, where eligible.

Ask whether the provider finances used equipment and related installation expenses. A refrigerator’s purchase price, for example, may not include delivery, removal of the old unit, or changes needed to fit the replacement.

5 restaurant equipment financing options

Several restaurant financing options can support equipment purchases. The main differences are what you own, how you repay, what the financing costs, and whether you qualify.

These categories can overlap. Dealer financing may involve a loan or lease, while SBA-backed loans and Toast Capital can cover business expenses beyond equipment.

1. Equipment loans

An equipment loan finances a specific purchase, while broader small business loans may support several business expenses. With an equipment loan, you purchase the asset and repay the lender under the agreed terms; the lender may hold a security interest in it.

• Advantages: You acquire equipment for long-term use without paying the entire purchase price upfront.

• Tradeoffs: Interest and fees increase the cost, and the lender may require a down payment or personal guarantee.

• May suit: Equipment you expect to keep and use for several years.

• What to check: The total repayment amount, collateral requirements, and whether the repayment term fits the equipment’s remaining useful life.

A lower payment can make a longer loan attractive, but consider whether you could still be making payments when the equipment needs replacing.

2. Equipment leasing

Leasing restaurant equipment generally means paying to use it rather than purchasing it immediately. Some agreements include an option to buy the equipment, while others require you to return it or renew the lease.

• Advantages: Leasing may require less upfront cash, and some agreements include maintenance or replacement options.

• Tradeoffs: Payments, buyout costs, and return requirements can make the total commitment larger than it first appears.

• May suit: Operators who don’t necessarily want long-term ownership or need equipment for a defined period.

• What to check: Who handles repairs, whether ownership transfers, and what happens when the agreement ends.

The Small Business Administration warns that leaving a lease early can carry substantial penalties. Don’t assume leasing means you can return the equipment whenever your needs change.

3. Dealer or manufacturer financing

Some equipment sellers offer financing directly or arrange it through another company. This can simplify the purchase, but the seller and the financing provider may be separate businesses.

• Advantages: You can coordinate equipment selection, purchasing, and financing in one process.

• Tradeoffs: A convenient offer isn’t necessarily the lowest-cost option.

• May suit: Operators buying a particular unit or equipment package.

• What to check: The cash price, financed price, financing provider, promotional conditions, and any final payment.

Request an itemized equipment quote separately from the financing offer. That makes it easier to compare another seller or lender without confusing the purchase price with the cost of borrowing.

4. SBA-backed loans

SBA-backed loans are issued through participating lenders, with support from the U.S. Small Business Administration. They are loans—not grants—and the permitted uses depend on the program.

SBA 7(a) loans can fund equipment purchases and installation alongside other eligible business expenses. SBA 504 loans support qualifying long-term assets, including equipment with at least 10 years of remaining useful life, but cannot fund working capital or inventory.

• Advantages: Different programs can support planned equipment investments or broader expansion projects.

• Tradeoffs: Eligibility, documentation, and lender requirements can make the application more involved.

• May suit: Operators planning ahead for a purchase rather than relying on immediate funding.

• What to check: Which program fits the equipment, what financial information is required, and when funds could become available.

Before committing to a delivery date, confirm the lender’s expected approval and funding process.

5. Toast Capital

Toast Capital provides eligible Toast customers access to business loans issued by WebBank, with advertised amounts of $1,000–$300,000 depending on eligibility.¹ These loans can fund equipment without being equipment-specific loans or leases.

• Eligibility: Evaluation considers business and Toast account history. There is no credit-score requirement to apply, but all loans remain subject to credit approval.²

• Application and funding: Applying for a Toast Capital Loan will not impact your personal or business credit score. Funding may arrive as soon as the next business day after signing your loan agreement, subject to processing times.⁴

• Cost: Repayment includes the amount borrowed plus a fixed fee. Paying early does not reduce that fee, according to the loan FAQ.

• May suit: Eligible operators whose equipment purchase and available cash fit the offered repayment schedule.

• Tradeoffs: Availability is limited to eligible Toast customers, and the shorter repayment horizon may not fit an investment that needs several years to repay.

Repayments generally come from a fixed percentage of daily card transactions processed through Toast. Target terms range from 90–360 days, with a maximum term ending 60 days after the target.³

Lower sales do not remove the repayment obligations. Applicable 270- and 360-day agreements include cumulative repayment milestones, and shortfalls may be collected through ACH. Any balance remaining at the maximum term is also collected through ACH.³

How much does restaurant equipment financing cost?

The total depends on the equipment price, financing structure, repayment term, fees, and your eligibility. A smaller payment doesn’t necessarily mean a less expensive agreement. Include these items in your restaurant budget:

• Upfront payment: A down payment, deposit, or advance lease payments.

• Interest or fixed fee: What the provider charges for financing.

• Additional charges: Origination, documentation, and other contractual fees.

• Repayment schedule: Payment frequency, repayment period, and any required final payment.

• Lease-end costs: Purchase, return, or renewal obligations.

• Early repayment: Whether paying sooner reduces the total cost.

For a hypothetical example, a $20,000 loan with a $3,000 fixed fee requires $23,000 in repayment before any other applicable charges. The fee equals 15% of the amount borrowed, but that does not make it a 15% APR.

APR expresses borrowing costs on an annualized basis and accounts for payment timing. A fixed fee and an annual interest rate therefore cannot be compared as though they mean the same thing. Toast’s financing disclosure explanation illustrates why a fixed-fee loan’s estimated APR can change with repayment timing even when its dollar cost stays the same.

Ask for the total repayment amount and APR or estimated APR, where available, then compare both with the payment schedule. For a lease, include any purchase option needed to reach the ownership outcome you want.

What do lenders consider when you apply?

Lenders evaluate whether the business can repay the requested financing. Requirements vary, so qualifying for one product doesn’t always mean you’ll qualify for another.

• Business performance: Revenue, cash flow, operating history, and existing debt.

• Credit: Personal or business credit, depending on the provider.

• Equipment details: Quote, age, condition, expected useful life, and installation needs.

• Security: Equipment collateral, other business liens, or personal guarantees.

• Documentation: Financial statements, bank statements, tax returns, and ownership information as requested.

Organized restaurant financial statements help explain what the business earns, owns, and owes. If you’re opening a restaurant, ask what the lender accepts when operating history is limited. You may need to provide owner financial information, relevant experience, a business plan, and realistic projections.

How to choose financing that fits your restaurant

The right agreement should help you get useful equipment without making everyday bills harder to cover. Work through these five checks before accepting an offer:

1. Price the complete project: Include delivery, installation, training, removal of old equipment, and cash needed during any disruption. Confirm which expenses the financing covers and which you must pay separately.

2. Estimate the operational benefit: Consider added capacity, less downtime, and operating savings—not just the appeal of a newer model. ENERGY STAR reports that certified commercial refrigerators and freezers are, on average, 20% more energy efficient than standard models. That is an equipment-efficiency comparison, not a promise of a 20% reduction in your total utility bill. Check for eligible rebates, too.

3. Test payments against slower sales: Use restaurant cash-flow projections to see whether repayments leave room for payroll, inventory, rent, and repairs. Don’t rely entirely on extra sales the new equipment might generate.

4. Compare equivalent offers: Use the same equipment cost and include all fees, payment obligations, and ownership conditions. Consider paying cash as well—but only if doing so would leave adequate operating reserves.

5. Read the agreement before signing: Confirm guarantees, security interests, missed-payment consequences, and what happens if the equipment fails. The FTC recommends getting anything you don’t understand explained in writing before committing.

Make room for your next equipment upgrade

The right equipment can help your team keep up with orders, avoid breakdowns, and make everyday work easier. But paying for it should leave room for everything else the restaurant needs, too.

Start with what you can comfortably repay, then compare your options. If you’re an eligible Toast customer, a Toast Capital offer gives you another option to consider. Look at the total cost and repayment terms so you can move forward with a clear plan—not just a new piece of equipment.

FAQ

What are the financing options for restaurant equipment?

Restaurant equipment financing options include equipment loans, leases, dealer or manufacturer financing, SBA-backed loans, and business loans such as Toast Capital for eligible Toast customers.

Can you finance used restaurant equipment?

Yes, some providers finance used restaurant equipment, but eligibility depends on factors such as its age, condition, remaining useful life, and the provider’s requirements.

What credit score do you need for equipment financing?

There is no universal minimum credit score for equipment financing; requirements vary by lender, and Toast Capital has no credit-score requirement to apply, although loans remain subject to credit approval.

How long does approval take?

Approval time varies by provider and application complexity, so confirm the expected timeline and distinguish loan approval from when funds become available.

Does applying for equipment financing affect my credit score?

It can if the provider performs a hard credit inquiry, but applying for a Toast Capital Loan does not affect your personal or business credit score.

¹ Toast Capital Loans are issued by WebBank. Loans are subject to credit approval and may not be available to borrowers in certain jurisdictions. WebBank reserves the right to change or discontinue this program without notice.

² Pre-qualified offers are based on information about your business and your account history with Toast, including your sales history, if applicable. All loans are subject to credit approval, and terms and availability may change based on your business’ ability to meet applicable credit and eligibility criteria.

³ Toast Capital Loans offer different target repayment terms ranging from 90 days to 360 days, depending on eligibility. The maximum repayment term is 60 days following the end of the target repayment term. Any outstanding balance due at the end of the maximum term will be collected automatically via ACH. If you select a 270- or 360-day target term, and you are provided with a Repayment Milestone Schedule with your Credit Agreement, then, every 30 days during the term, your total payments to date must equal the minimum amount disclosed to you. If they fall short, the difference may be collected via ACH.

⁴ Get funds in your account as soon as the next business day after approval, subject to processing time and completion of your loan agreement.

This information is provided for general informational purposes only. Consult a qualified financial, legal, or tax professional for advice specific to your situation.