Lease Restaurant Equipment: 101 Guide To Equipment Rentals

There are a number of difficulties restauranteurs face that managers in other industries don't have to deal with. One of these is the high expense of commercial kitchen equipment needed to provide all of your diners with the quality food they expect.

Given the difficulty of restaurant equipment financing, a lease contract can be a good solution for both new and established restaurants when faced with these unexpected expenses. However, leasing equipment is a big decision, and your business will rely on this equipment. Hence, making a good decision and ensuring you take on affordable monthly payments is a must.

So, here's Epos Now's trusty guide to help you lease equipment the right way.

When should you finance restaurant equipment by lease?

Most restaurant kitchens depend on industrial quality equipment needed to produce dishes quickly and in high quantities on a daily basis. Such equipment costs enough that new businesses will likely have factored in the expense of either new restaurant equipment or used restaurant equipment.

For a new business, purchasing equipment outright for a full kitchen can cost tens of thousands of dollars they cannot afford upfront. In such a situation, leasing becomes not only a viable alternative to purchase but the best option as part of your business plan to avoid taking out an excessive amount of credit.

Alternatively, businesses that have been open for any length of time and operating using their equipment are vulnerable to faulty equipment or accidents that leave them needing replacements. In such situations, short-term use of commercial equipment through a lease can give them time to decide on a long-term solution without limiting the service of the business.

There are a number of other situations that warrant lease payments for a restaurant kitchen or bar:

• If the restaurant wishes to run a special event or dish that requires leasing equipment, especially for that purpose, a full-out purchase would be a waste of money, but a rental is perfect.
• You may be able to obtain equipment purchase at the end of a restaurant equipment leasing that helps you avoid high up-front costs without equipment finance from third parties and still allows your business to obtain the technology you need to operate.
• If the leasing company offers equipment for a reasonable enough monthly payment, there's no reason why long-term leasing wouldn't work well for a successful restaurant.

What should you focus on when restaurant equipment leasing?

There are several factors you ought to consider when deciding who to trust and which deal to go for when leasing equipment. These can be grouped into financial elements and equipment quality elements.

Financial elements

• Is there a down payment as part of the deal? When assessing the value of a lease offer, a lump sum with the first payment could make your loan offer less appealing, especially if you're taking the deal out due to a shortage of cash flow.
• Will you require a bank loan or working capital loan to make the deal? Making a deal through multiple funding sources complicates this process a great deal. Keeping things simple often makes leasing cheaper and can prevent missed payments or bounced payments from affecting your credit rating.
• How long is the lease term? An open rental can be returned at any point, but many leases may have minimum lengths and clauses in the contract that may cause further complications. It's therefore good to be thorough and to read reviews to see if the contract has caused issues for other customers.

Equipment quality factors

• Will the equipment be new or used when leased? The efficacy and reliability of your equipment will vary with age, so asking the restaurant equipment provider the age of the products they're offering can help indicate how likely you'll encounter a fault when using it.
• What guarantees does the company provide about reliability, replacements, and the condition of products? Does your leasing company guarantee speedy replacement in the event of reliability issues? Furthermore, if the equipment isn't new, you may encounter deteriorating conditions and loss of functions, so asking about these things can help ensure you get the best quality.
• Are you leasing top-of-the-range kitchen equipment? Sometimes, leasing top-quality equipment can be better valued than purchasing, particularly in the short term, so leasing a little bit of extra quality may be worthwhile. However, you should definitely ensure that you lease professional quality to guarantee your kitchen staff can continue to produce industry-standard dishes.

Is an equipment lease better than purchasing outright?

The benefits of restaurant equipment leasing with the right deal can include affordable monthly payments for top-quality equipment without having to piece together the large initial output for purchase.

Even in scenarios when the business can afford equipment finance, it might be that an output of that size prevents the restaurant from investing in other areas, such as marketing, opening new sites, or increasing capacity, which can lead to slower growth.

Incorporating equipment expenses into your business plan is an essential part of restaurant management, and an initial purchase may mean cheaper hardware overall. But an initial purchase of equipment that lasts for many years can mean great savings for the business. A key question each restaurant must answer is where to invest its capital.

Ultimately, determining whether a lease is better or worse than an outright purchase or the option of purchasing on credit and paying interest rates on the hardware depends on the situation of the individual restaurant. It's therefore necessary to weigh up the factors considered in this article and determine how best to conduct your own equipment financing.

Use Epos Now for the best restaurant POS equipment

With software and hardware tailor-made to benefit the restaurant industry, Epos Now technology makes life in a restaurant better for customers and staff alike. The Epos Now POS system offers restaurants the flexibility to run operations in a professional way that suits their unique needs:

• Sell quickly and reliably on the latest transaction software, with options to use in-house payment processing services, delivery platform integration, and takeaway options.
• Help your staff work more effectively using Epos Now's hardware and software solutions, mobile POS, KDS systems, and product information access.
• Know your business better through hundreds of detailed, downloadable business reports on sales, staff, customers, inventory, and more, viewable 24/7 through the Epos Now cloud.
• Receive the best support and advice on using your restaurant POS from a dedicated Epos Now team, with online resources and the benefit of the Epos Now AppStore to help you expand your system.

To find out more about Epos Now Epos Now POS systems for hospitality professionals, submit your details below and speak with a member of our expert team.

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