Restaurant Equipment Financing: Rates, Terms & How to Qualify

Restaurant equipment financing is a loan or lease used to acquire commercial kitchen gear — ovens, ranges, walk-in coolers, dishwashers, POS systems, and more — without paying the full cost upfront. The equipment serves as collateral, so lenders often fund up to 100% of the price and let you spread the cost over the equipment's useful life, typically two to seven years.

For most restaurants and ghost kitchens, equipment is the single largest startup and expansion cost. A six-burner range, a hood system, and one walk-in cooler can easily run $60,000 before you plate a single dish. Paying cash drains the reserves you need for payroll and inventory — which is exactly why equipment financing exists.

How does restaurant equipment financing work?

The structure is simple. A lender pays your vendor or dealer directly for the equipment, and you repay the lender in fixed monthly installments over an agreed term. Because the equipment itself is the collateral, the deal is "secured" without you putting up a home, savings, or other property.

Three features define how it works:

• Up to ~100% financing. Strong applicants often finance the entire purchase, sometimes including delivery and installation ("soft costs"). Weaker credit may require 10–20% down.
• Term matched to useful life. Lenders set the term to roughly match how long the equipment will last — a walk-in cooler might get 5–7 years, a tablet-based POS only 2–3.
• Fixed payments. Most equipment loans carry a fixed rate and fixed monthly payment, making the cost predictable for budgeting.

When you finish paying, you own the equipment outright (with a loan) or have the option to buy it for a small residual (with many leases).

What restaurant equipment can you finance?

Almost any income-producing asset in a commercial kitchen qualifies. Common categories include:

• Cooking line: ranges, ovens, fryers, griddles, charbroilers, combi ovens, and pizza ovens
• Refrigeration: walk-in coolers and freezers, reach-in units, prep tables, and ice machines
• Warewashing: commercial dishwashers, three-compartment sinks, and water filtration
• Ventilation: exhaust hoods, make-up air units, and fire-suppression systems
• Front of house: POS systems, kitchen display screens, payment terminals, and self-order kiosks
• Prep and storage: mixers, slicers, prep stations, worktables, and shelving
• Ghost-kitchen build-outs: the full equipment package for a delivery-only kitchen, often financed as a single bundle

For a deeper look at outfitting a delivery-only operation, see our ghost kitchen financing guide and our dedicated equipment financing page.

Can you finance new vs. used equipment?

Both are financeable. New equipment gets the longest terms, lowest rates, and full manufacturer warranties. Used and refurbished equipment — common in an industry where startups buy from auctions and closed restaurants — is also widely financed, as long as it has verifiable resale value and remaining useful life.

Expect used-equipment deals to carry slightly shorter terms and rates a point or two higher, since the collateral is worth less and depreciates faster. Many operators blend both: financing a new hood system on a long term while financing a used walk-in from a dealer auction on a shorter one.

Lease vs. loan: which is right?

The two ways to finance equipment serve different goals. A loan builds ownership; a lease maximizes flexibility and cash flow.

How does the Section 179 tax angle work?

Section 179 of the U.S. tax code lets a business deduct the full purchase price of qualifying equipment in the year it's placed in service, rather than depreciating it over many years. Financed and leased equipment generally qualifies — meaning you can deduct the entire cost of an oven you bought with a loan while having paid only a few months of installments.

The practical effect: the tax savings in year one can offset a large share of your payments, lowering the real cost of the equipment. Limits and rules change annually, so confirm current thresholds with a tax professional before counting on the deduction.

How do you qualify for restaurant equipment financing?

Equipment financing is among the easier business loans to qualify for because the equipment reduces the lender's risk. Most lenders weigh three things:

• Time in business. Six months to two years is typical; startups can still qualify with a larger down payment or a strong personal credit profile.
• Revenue and cash flow. Lenders confirm you generate enough to cover payments — often via 3–6 months of bank statements. Newer restaurants may show projections plus the equipment's earning potential.
• Credit. Scores of 600+ open most doors; 680+ earns the best rates and zero-down terms. Sub-600 borrowers can often still qualify with money down.

If revenue is the gap rather than credit, pairing equipment financing with working capital can cover the broader needs of a build-out.

What rates, terms, and speed should you expect?

Pricing depends on credit, time in business, and whether the equipment is new or used. The table below shows representative ranges in the current U.S. market.

Rates commonly land between roughly 8% and 30% APR depending on your profile, with the strongest borrowers near the low end. Funding is fast — often 1–3 business days — because underwriting centers on the equipment and your recent cash flow rather than a lengthy bank review.

Use the calculator to estimate a monthly payment for your equipment package.

Is restaurant equipment financing worth it?

For most operators, yes. Financing converts a large one-time outlay into predictable payments the equipment helps pay for as it generates revenue. You keep cash for payroll, inventory, and the unexpected, and you may capture meaningful tax savings through Section 179. The main caution is total cost: for long-life assets you'll own for a decade, owning via a loan usually beats leasing on lifetime cost — so match the product to the equipment.

For the full picture of how equipment financing fits alongside working capital, lines of credit, and SBA loans, see our pillar guide on restaurant business financing.