Leasing Restaurant Equipment: What You Need to Know
Looking for restaurant equipment to lease? If you’re opening a new restaurant but your budget doesn’t allow for all new equipment, you can lease instead. Investing in restaurant equipment is a big decision and has high startup costs attached — so you’ll want to ensure that you’re making a financially sound decision.
Whether you decide to rent or sign a lease-to-own contract, we’ve listed what you need to know about obtaining restaurant equipment.
Kitchen Opening and Closing Checklist
Pros and Cons of Leasing Restaurant Equipment
You don’t need a lot of cash to get your equipment
With rental restaurant equipment, you can get your restaurant running without a considerable investment upfront. Monthly payments are more feasible. Some companies provide lease-to-own restaurant equipment as well.
Potential for Tax Deductions
You may be able to add your lease payments as a business expense, marginally lowering the cost of the equipment.
Cost-effective solution for pop-ups or temporary restaurants
If you’re running a pop-up or seasonal restaurant, leased equipment provides the flexibility of having what you need without the responsibility of ownership.
You’re liable for repairing any damages
Leasing restaurant rental equipment requires a high level of care, as you’re responsible for eventually returning the equipment. You may have to budget for potential damages outside of normal wear and tear.
You don’t have to worry about paying interest with equipment you own, and interest rates can vary according to your credit score.
Early Termination Fees
If you decide to end your lease agreement early, you might be looking at termination fees.
Pros and Cons of Buying Restaurant Equipment
Simpler and faster process
Leasing can add another layer of paperwork and negotiation, such as long contracts, clauses, or early termination agreements.
No substitutions necessary
Leasing restaurant equipment may mean compromising on certain bells and whistles. Buying enables you to customize equipment to fit your restaurant’s needs.
Restaurant equipment will inevitably have issues — but the last thing you need is costly, unexpected repairs. Most warranties usually last a few years, providing you with peace of mind and big savings down the line.
- The minute you purchase restaurant equipment, its value starts to decrease dramatically. If you intend to eventually sell your restaurant equipment, you’ll want to keep this in mind.
Getting Into Debt
You’ll want to have money saved for any potential setbacks. If you take a line of credit, you may pay high interest rates on depreciated equipment.
Restaurant equipment is constantly evolving with new features. Deciding to buy means that you’ll likely wait years before deciding to upgrade.
Standard restaurant equipment leasing
Fortunately, many restaurant equipment stores offer leases online. Add the equipment you want to your cart and enter your information. Most sites will redirect you to a third-party vendor like QuickSpark, where you’ll fill out an application. Once approved, the vendor will contact you about payment options and your contract. The store will ship your equipment after the first payment is received.
How much does restaurant kitchen equipment rental cost?
Gas ranges (both propane and natural gas): $49-$500/month
Electric ranges: $69-$450/month
Convection Ovens: $30-$578/month
Combination Ovens: $193-$815/month
Reach-In Refrigerators: $37- $663/month
Reach-In Freezers: $41-$667/mo
Restaurant equipment leasing to own
Leasing to own restaurant equipment can be a viable option if you don’t have the capital to purchase everything you need outright (or want to free up some cash). The arrangement usually comes with a few benefits like manufacturer’s warranties, replacement options for defective equipment, and more. Similar to leasing, you’ll be approved by a third-party vendor and set your payment terms.
How to Lease Restaurant Equipment
1. Select the equipment you want to finance from a restaurant equipment store online.
2. Proceed to checkout, making sure to press “Lease” or “Financing” (if you’re leasing to own).
3. Complete the application to see if you qualify.
4. Once approved, a third-party leasing vendor will contact you to review contract and leasing terms.
5. The vendor will send a payment to the restaurant equipment store and your order will be processed for delivery. Note: payments are made to the leasing vendor, not the store.
Lease or Buy?
The decision to buy or lease restaurant equipment is an important one, with many options. There’s no right or wrong way to get the equipment you need. Every restaurant is different – assess your needs, cash flow, and goals (both short- and long-term) before taking the plunge.
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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.