What restaurant equipment can you finance?
Most commercial kitchen equipment qualifies for finance, from ovens and fridges through to coffee machines and point-of-sale systems. Commercial equipment finance covers anything considered plant and equipment, meaning assets you use to generate income in your business.
Consider a Perth café owner looking to replace an ageing three-group espresso machine and grinder. The replacement cost sits around $18,000. Rather than pulling that amount from working capital, they structure it as a chattel mortgage over three years. Monthly repayments sit at roughly $550, and the full purchase price becomes tax deductible as a business expense. The equipment remains an asset on their balance sheet, and the café continues to operate with steady cashflow.
How commercial equipment finance works for restaurants
You select the equipment, agree on a purchase price with the supplier, and the lender pays the supplier directly. You take ownership immediately and repay the lender in fixed monthly instalments. At the end of the term, you own the equipment outright.
This structure applies whether you're buying new equipment or upgrading existing setups. A Fremantle restaurant upgrading to energy-efficient refrigeration might finance $40,000 worth of cold rooms and display fridges over five years. The monthly commitment stays predictable, and because the equipment is used solely for business purposes, both the repayments and depreciation can be claimed as tax deductions.
Chattel mortgage versus hire purchase
A chattel mortgage lets you own the equipment from day one, which makes it tax effective because you claim depreciation and deduct interest. The equipment acts as collateral, and you're registered as the owner on the Personal Property Securities Register.
Hire purchase delays ownership until the final payment, but the structure can suit businesses with limited ABN history or those seeking lower documentation requirements. Monthly repayments under hire purchase tend to be slightly higher because the lender retains ownership as security. For most established restaurants, a chattel mortgage delivers better tax outcomes and lower overall cost.
What lenders look at when assessing restaurant equipment finance
Lenders assess your business financials, ABN history, and the equipment itself. They want to see consistent revenue, manageable existing debt, and equipment that holds residual value. Restaurants operating for at least 12 months with stable turnover typically qualify without difficulty.
A Margaret River winery restaurant looking to finance a $25,000 wood-fired oven and extraction system would provide recent BAS statements, a year of bank statements, and a supplier quote. The lender reviews cashflow to confirm the business can service the monthly commitment alongside existing obligations. Because commercial kitchen equipment is widely used and retains value, approval rates for established venues remain high.
Fixed monthly repayments and cashflow planning
One advantage of equipment finance is the certainty it creates. Fixed monthly repayments let you plan cashflow without worrying about rate changes or ballooning costs. You know exactly what leaves the account each month, which makes budgeting for wages, stock, and rent far more predictable.
Restaurants operate on thin margins, and unexpected capital expenses can destabilise cashflow quickly. Spreading the cost of a $30,000 commercial dishwasher or combi oven over 36 or 60 months means you're not pulling tens of thousands from your operating account. The equipment pays for itself through the revenue it generates, and your cash reserves stay intact for the inevitable quiet months or urgent repairs.
Tax deductions and depreciation
When you finance commercial equipment under a chattel mortgage, you can claim both the interest component of your repayments and the depreciation of the equipment as tax deductions. This reduces your taxable income and improves cashflow.
Depreciation rates vary depending on the equipment type. Most commercial kitchen equipment falls into a category that allows 20% to 30% annual depreciation. The instant asset write-off threshold changes periodically, but even outside those thresholds, depreciation remains a significant benefit. Your accountant can model the tax impact before you commit, so you understand the real cost after deductions.
Financing specialised equipment for niche venues
If your restaurant focuses on a specific cuisine or service style, you might need equipment that falls outside the standard commercial kitchen range. Wood-fired pizza ovens, tandoor ovens, sous vide setups, smokers, and high-volume pasta machines all qualify for finance.
Lenders assess specialised equipment on residual value and relevance to your business model. A high-end Japanese restaurant in Subiaco financing a $50,000 robata grill and ventilation system would structure it over five years. The equipment is essential to their offering, and the lender views it as core to the business rather than a discretionary upgrade. As long as the business demonstrates capacity to service the repayments, specialised equipment is financed in the same way as standard items.
How to compare finance options across lenders
Interest rates, fees, and repayment flexibility vary between lenders. Some offer lower rates but charge higher establishment fees. Others allow early repayment without penalty, while some lock you into the full term.
When comparing options, look at the total cost across the life of the lease, not just the monthly repayment. A rate that appears lower might come with a residual payment at the end of the term, which increases the total amount you repay. Ask about early exit fees, monthly account-keeping charges, and whether the rate is fixed or variable. Most restaurant equipment finance is written on a fixed rate, which protects you from rate rises but also means you won't benefit if rates fall.
BE Approved accesses equipment finance options from banks and lenders across Australia, which means you're not limited to a single product or rate. We compare terms and structure the loan around your business needs, whether that's minimising the monthly commitment, reducing the total interest cost, or building in flexibility for seasonal cashflow.
When to consider leasing instead of purchase finance
Leasing suits businesses that want to upgrade equipment regularly or avoid ownership. You make fixed payments over the lease term, then return the equipment or upgrade to newer models. This works well for technology-dependent equipment like point-of-sale systems or digital menu boards, where obsolescence happens quickly.
For most restaurant equipment, ownership delivers better long-term value. A commercial oven or fridge used daily for five or ten years becomes a fully depreciated asset with ongoing utility. Leasing those items means you're paying for equipment you'll never own, and the total cost over multiple lease cycles exceeds the purchase price. Leasing makes sense when the equipment becomes outdated faster than it wears out, but for core kitchen equipment, ownership through a chattel mortgage or hire purchase is the more cost-effective path.
What happens if your business is less than 12 months old
Lenders prefer at least 12 months of trading history, but newer businesses can still access finance with a larger deposit, director guarantee, or additional security. If you're opening a new venue or expanding shortly after launch, expect to provide more documentation and possibly accept a higher rate.
A new restaurant in Northbridge looking to finance $60,000 worth of kitchen equipment might offer a 20% deposit and a personal guarantee from the directors. The lender uses the equipment as primary security and the guarantee as additional comfort. Once the business has traded for a full year with consistent revenue, refinancing to a standard product with a lower rate becomes an option.
BE Approved works with lenders who assess newer businesses on projected cashflow and industry experience, not just historical financials. If you've run restaurants before or have strong supplier relationships and pre-opening bookings, those factors can support an application even without 12 months of BAS statements.
Call one of our team or book an appointment at a time that works for you. We'll review your equipment needs, compare lenders, and structure a finance option that supports your business cashflow without tying up capital you need for daily operations.
Frequently Asked Questions
Can I finance second-hand restaurant equipment?
Yes, most lenders finance used commercial kitchen equipment as long as it meets age and condition requirements. The equipment typically needs to be less than 10 years old and in good working order, with a valuation provided by the supplier.
What deposit do I need for restaurant equipment finance?
Most lenders require a 10% to 20% deposit, though some approve 100% finance for established businesses with strong financials. A larger deposit can reduce your interest rate and improve approval odds if your business is newer.
How long does equipment finance approval take?
Approval for straightforward applications typically takes 24 to 48 hours once you've submitted financials and a supplier quote. Settlements can occur within a week, depending on how quickly the supplier and lender process documentation.
Is the interest on equipment finance tax deductible?
Yes, when you finance equipment under a chattel mortgage, the interest portion of your repayments is tax deductible. You also claim depreciation on the equipment itself, which further reduces your taxable income.
Can I include installation costs in the finance amount?
Yes, most lenders allow you to include delivery, installation, and commissioning costs in the total loan amount. This means you're not paying those expenses upfront and can spread the full project cost across the loan term.
