Restaurant equipment financing pays for kitchen equipment like walk-in coolers, ovens, ranges, and dish machines, with the equipment as collateral and fixed payments matched to how long it will last. A 90-seat restaurant replacing a failing walk-in typically gets a decision in 24 to 48 hours and funding within days of accepting.
That restaurant is a neighborhood Italian place, eight years old, doing about $1.6 million a year. Its walk-in cooler is fifteen years old and the compressor has failed twice this summer. The owner has a quote for a new 8-by-10 walk-in at $28,000 installed, and while the contractor is there, she wants to add a second deck oven for $22,000 so the pizza station stops backing up on Fridays. She has the cash, but it's the cash that covers payroll in January.
How does restaurant equipment financing work?
The lender pays the vendor, you get the equipment, and you make fixed payments over a set term. The equipment secures the loan, so in most cases nothing else is pledged.
Through Sagamore's lending partners, equipment financing runs from $10,000 to $5 million, new or used, and can cover up to 100% of the cost. Decisions typically come back within 24 to 48 hours. Funding follows within 1 to 3 business days of accepting, depending on how fast the vendor sends final invoices.
For the Italian restaurant, $50,000 for the walk-in and oven is a routine request. The payment comes from the same revenue the equipment protects: a working walk-in prevents lost inventory, and the second oven adds covers on the busiest nights.
What restaurant equipment can you finance?
Almost anything with a serial number and a vendor invoice. How easily it finances depends on how well it holds value.
| Equipment | Finances easily? | Notes |
|---|---|---|
| Ranges, ovens, fryers, griddles | Yes | Standard brands help |
| Walk-in coolers and freezers | Yes | May need a landlord waiver |
| Reach-ins, prep tables, ice machines | Yes | Often bundled into one deal |
| Dish machines | Yes | Some are leased with service included |
| Combi ovens, specialty pizza or wood-fired ovens | Usually | Specialty units may need money down |
| POS terminals and kitchen display systems | Usually | Software may need to be paid separately |
| Hood and fire suppression systems | Harder | Becomes part of the building; often better on a term loan |
| Furniture, décor, signage | Harder | Little resale value; a term loan fits better |
The rule underneath the table: lenders finance what they could recover and resell. Equipment that becomes part of the building, or that only fits your concept, carries less collateral value, so lenders lean on your cash flow instead.
Should a restaurant finance, lease, or pay cash?
It depends on the equipment's life and how much cash you need to keep.
| Finance | Lease | Pay cash | |
|---|---|---|---|
| Ownership | Yours once paid | Lessor's, with a possible buyout | Yours now |
| Fits | Equipment you'll run for years: ovens, walk-ins, ranges | Gear that dates fast or comes with service: dish machines, POS | Small items, when reserves are deep |
| Cash today | Little or none | Little or none | Full price |
| Cost over time | Payments plus financing cost | Often higher over the full term | Lowest, if reserves aren't needed |
Most restaurants should keep at least a month of operating costs in the bank. If paying cash for equipment would take you below that, financing is the safer choice. Our comparison of equipment financing vs. leasing covers the trade-offs in more detail.
What do lenders look for in a restaurant?
Restaurants are a careful category for lenders, so the file needs to be clean. Sagamore's lending partners require:
- A credit score of 600 or higher
- At least one year in business
- At least $400,000 in annual revenue
They also look at:
- Bank statements. 3 to 6 months, showing steady deposits and few overdrafts
- Card processing statements. They show sales volume and seasonality
- Existing debt. Especially merchant cash advances with daily debits. One advance can sink an otherwise approvable file
- Your lease. How many years remain, and whether the landlord will sign a waiver for fixed equipment
- The quote. Vendor, model numbers, and installation costs itemized separately
An eight-year operating history with steady deposits, like the Italian restaurant's, is what lenders want to see. A restaurant under a year old doesn't qualify through Sagamore, and one with a lease ending next year will get hard questions about fixed equipment.
Does a slow season hurt approval?
Not on its own. Lenders read card processing statements for consistent sales across the year, and a restaurant with a predictable quiet January can still qualify. What worries them is a slow month with no cushion. A line of credit held for those months keeps the equipment payment from competing with payroll, and our guide to working capital for a seasonal business covers how to size one.
When is a term loan better than equipment financing?
When most of the cost isn't equipment. A kitchen refresh often looks like this:
- $40,000 in equipment (ranges, fryers, reach-ins)
- $35,000 in a new hood and fire suppression system
- $18,000 in electrical, gas, and plumbing work
- $12,000 in permits, design, and contingency
Only the first line is easy collateral. A term loan from $10,000 to $2 million, repaid over 6 to 60 months, can cover the whole project in one payment. Some owners split it: equipment financing for the equipment, a smaller term loan for the rest. If the project grows into a remodel or a second location, see our guide to a restaurant renovation loan.
What happens when equipment fails without warning?
Speed matters, because a dead walk-in on a Friday costs you inventory and a weekend of sales. Two things help:
Get a quote fast and send it with your application. Equipment lenders move on a vendor invoice. The sooner you have one with model numbers and a delivery date, the sooner a lender can approve it.
Don't reach for a daily-debit advance. It's the fastest money available, and the daily withdrawals will squeeze your cash flow long after the cooler is running. A 24 to 48 hour equipment decision is usually fast enough, especially if a rental unit or a refrigerated trailer can bridge a few days.
If you already paid, ask about reimbursement. When the cooler couldn't wait and you paid the vendor from operating cash, some equipment lenders will reimburse the purchase instead of paying the vendor directly. Apply with the paid invoice and proof of payment, and the financing can refill the account you drained.
What about taxes?
Section 179 and bonus depreciation can let a restaurant deduct much or all of an equipment purchase in the year it's placed in service, even when financed. Whether and how much depends on your situation, so talk to your tax advisor before you buy.
How do you get started?
Get an itemized quote, pull your last six months of bank and card statements, and know how many years remain on your lease. Then compare offers on total cost, not just the monthly payment.
Food trucks have their own considerations, covered in our guide to food truck financing. Our restaurant financing page covers the rest of what restaurants finance, from renovations to slow-season working capital. For a restaurant replacing or adding kitchen equipment, start an application. Sagamore is a broker, not a lender: one application reaches several equipment lenders, and the first review is a soft credit pull.
