When Equipment Financing or a Loan Is the Right Choice for a Restaurant
Restaurant equipment financing refers to a form of loan which allows small businesses to access capital in order to buy equipment. The good news is that the equipment itself will act as collateral for your loan. If your restaurant needs a new truck, a new stove, or virtually any piece of equipment, financial service companies will let you access secured equipment financing without demanding that you put some other asset as collateral. Owing to the self-secured nature of equipment financing, it is often perfect for startups and restaurant business owners with bad personal credit.
When you think about investing in restaurant equipment, even just looking at the retail prices of ovens, food trucks, and stoves is enough to turn you away from that investment. Even when you have the money to invest in equipment for your restaurant, paying out-of-pocket for it could affect your working capital. Those are the kinds of issues which equipment financing was invented to resolve.
If you do not have the requirement for a new piece of equipment in order to expand your restaurant, you should seek other loan options that will not fundamentally rely on business equipment purchases. Equipment financing is the right choice only if you have to invest in a single piece or multiple pieces of equipment.