By Kitchens Finance Editorial · Published May 15, 2026
How to finance a restaurant kitchen build-out without stalling your opening
Hood systems, walk-ins, gas lines, and a full line cost six figures fast. Here's how restaurant operators finance a kitchen build-out — equipment financing, term loans, and SBA — and how to stage the spend so cash lasts to opening night.
A commercial kitchen build-out is one of the largest checks a restaurant ever writes, and almost none of it is optional. The hood and make-up air system, the walk-in, the gas line, the grease trap, the fire suppression — these are code, not nice-to-haves. Financing lets you spread that cost over years of service instead of draining the cash you need to actually open the doors and survive the first slow season.
Key takeaway
Split a kitchen build-out into hard equipment (finance with equipment loans, secured by the gear) and leasehold improvements (finance with a term loan or SBA loan). Keep cash on hand for opening payroll and food cost — that runway is what gets you to a profitable month.
What a build-out actually costs
Numbers vary wildly by market and concept, but most full-service kitchen build-outs land somewhere in this range:
| Line item | Typical range | How it's usually funded |
|---|---|---|
| Hood, make-up air & fire suppression | $15K – $60K | Equipment financing |
| Walk-in cooler / freezer | $10K – $40K | Equipment financing |
| Cooking line (range, fryers, combi) | $25K – $120K | Equipment financing |
| Plumbing, gas & electrical | $20K – $90K | Term loan / SBA |
| Millwork, dining room & finishes | $30K – $150K | Term loan / SBA |
Match the financing to the asset
The trick is not putting everything on one product. Hard equipment is collateral, so it finances cheaply and quickly. The "soft" build-out costs — the work that's permanently attached to a space you may not own — need a term loan or an SBA loan instead.
Finance the hard equipment first
Ranges, hoods, walk-ins, dish machines, and refrigeration can be financed up to 100% of cost, often with the equipment itself as the only collateral. This is the cheapest money in the build-out.
Cover leasehold improvements with a term loan
Plumbing, gas, electrical, and millwork don't make good standalone collateral, so they're funded with a term loan or — for established operators — an SBA 7(a) loan with longer terms and lower rates.
Hold back a cash runway for opening
Don't spend your last dollar on tile. Keep 60–90 days of payroll and food cost in reserve so a soft opening or a slow first month doesn't sink an otherwise healthy concept.
Finance vs. pay cash for the build-out
Pros
- Preserves cash for opening payroll, food cost, and slow early weeks
- Spreads a six-figure cost over the equipment's service life
- Fixed, predictable payments you can build into your pro forma
- Potential Section 179 tax advantages on equipment
Cons
- You pay interest over the term
- Equipment is collateral until the loan is paid off
- Leasehold improvements stay with the space if you move
Estimate the monthly payment
Use the calculator to see what a build-out might cost per month across a representative APR range. Set the amount to the portion you plan to finance — equipment plus leasehold improvements — and pick a term that fits your projected ramp.
Estimate your monthly payment
A representative estimate at 8%–24% APR. Actual rates and terms vary by business and product.
Get equipment quotes before you apply
Lenders fund faster when you bring real invoices. A signed equipment quote and a contractor bid for the leasehold work let an underwriter size the deal in one pass instead of going back and forth.
When it makes sense
If the build-out lets you open a concept that clears its monthly payment with room to spare, financing nearly always pays for itself — and it keeps the cash cushion that gets a new restaurant through its first fragile months. Paying cash only makes sense if you're well-capitalized and certain you won't need that runway.
Can I finance leasehold improvements, not just equipment?
Yes. Hard equipment (ranges, hoods, walk-ins) is easy to finance because it's collateral, but build-out costs like plumbing, electrical, gas lines, and millwork are usually funded through a term loan or SBA loan rather than equipment financing.
Should a first-time operator finance or pay cash for a build-out?
Most operators finance the build-out and keep cash as an opening-and-ramp reserve. Restaurants are notoriously thin on cash in the first 90 days, so preserving a runway for payroll, food cost, and slow early weeks usually matters more than avoiding interest.
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