Simple hacks to finance hospitality equipment

If you're opening a cafe, fitting out a restaurant, or upgrading kitchen equipment in an established venue, paying cash upfront ties up capital you'd rather use for stock, staff, or marketing.

Equipment finance lets you spread the cost of ovens, espresso machines, refrigeration, dishwashers, and point-of-sale systems into fixed monthly repayments while you start generating revenue from day one.

What hospitality equipment can you finance?

You can finance most items that have a useful life and hold residual value. That includes commercial ovens, benchtops, coolrooms, refrigerators, freezers, coffee machines, ice makers, dishwashers, grills, fryers, and front-of-house fit-outs like furniture, lighting, and bar equipment. Point-of-sale systems, back-of-house technology, and ventilation systems also qualify.

In our experience, operators financing a fit-out usually combine kitchen and customer-facing items into a single facility rather than splitting them across multiple applications. This keeps repayments consolidated and reduces paperwork.

Chattel mortgage vs hire purchase for hospitality gear

A chattel mortgage suits businesses registered for GST. You own the equipment from day one, claim the GST upfront as an input tax credit, and the repayments are tax deductible. The loan is secured against the equipment itself, so it doesn't require property as collateral.

Hire purchase means the lender owns the equipment until the final payment. You still use it from the start, but ownership transfers at the end of the term. This can work if you want a simpler tax treatment or aren't registered for GST, though most hospitality operators prefer the chattel mortgage structure because of the upfront GST claim.

Consider a cafe operator in Brighton fitting out a new site. They need $80,000 worth of kitchen equipment and front-of-house furniture. With a chattel mortgage, they claim back the GST component immediately, reducing the effective loan amount. The equipment secures the loan, and monthly repayments are written off as a business expense.

How deposit and loan amounts work

Most lenders ask for a deposit between 10% and 30% of the equipment cost, depending on your trading history and financial position. Established operators with strong financials might secure 100% finance for certain equipment types, while newer ventures usually need a deposit to reduce lender risk.

The loan amount covers the balance after your deposit. If you're buying $100,000 in equipment and contributing a 20% deposit, you'd finance $80,000. Lenders also consider whether you're purchasing new or used equipment. New items with full manufacturer warranties typically attract lower rates and higher loan-to-value ratios than second-hand gear.

Fixed repayments and tax deductions

Repayments are fixed for the life of the lease or loan term, which usually runs between two and seven years depending on the equipment's expected lifespan. A commercial oven might suit a five-year term, while a coffee machine might be financed over three years to align with its replacement cycle.

Because the equipment is used to produce taxable income, your repayments are tax deductible. You also claim depreciation on the equipment itself, which reduces your taxable income further. This makes equipment finance more tax effective than paying cash, because you're converting a lump sum capital expense into deductible operating costs spread over time.

Upgrading existing equipment without burning cashflow

If your refrigeration is reaching end-of-life or you want to add capacity during a busy season, financing the upgrade means you're not pulling capital out of the business when you need it most. You keep your working capital for wages, rent, and stock, and the new equipment starts contributing to revenue immediately.

A Richmond restaurant recently upgraded their coolroom and added a second dishwasher ahead of summer. Financing $45,000 in equipment meant they could handle higher covers without touching their cash reserves. The additional revenue from extra table turns covered the monthly repayment within the first quarter.

What lenders look for in hospitality applications

Lenders review your trading history, current revenue, and how long you've been operating. If you're an established venue, they'll ask for recent financial statements or BAS summaries. For new ventures, they focus on your deposit size, business plan, and whether you have relevant industry experience.

The equipment itself is also assessed. Lenders prefer items that hold value and can be resold if needed. A commercial oven from a recognised manufacturer is more attractive than custom-built equipment with limited resale appeal. They also consider whether the equipment fits your business type. Financing espresso machines for a cafe makes sense; financing the same machines for a hardware store would raise questions.

How to structure finance for a full fit-out

If you're fitting out a new venue or refurbishing an existing one, you can package kitchen equipment, furniture, technology, and fixtures into a single facility. This gives you one monthly repayment instead of juggling multiple loans, and the approval process is faster than applying separately for each category.

We regularly see operators combine $150,000 to $300,000 in equipment across kitchen, bar, and dining areas into one chattel mortgage. The term is usually set to match the longest-life item in the package, with the option to refinance or upgrade individual items partway through if needed.

Timing your application around settlement or opening dates

If you're leasing a premises and need equipment installed before opening, apply for finance at least four weeks ahead of your target date. This gives time for lender assessment, equipment ordering, and delivery scheduling. Most lenders won't draw down the loan until the equipment is delivered or installed, so coordinate your supplier and your financier early.

For established venues upgrading equipment, timing is more flexible. You can apply, get approval, and draw down within a fortnight if your financials are current and the equipment is in stock.

Accessing multiple lenders through a broker

A broker puts your application in front of multiple lenders who specialise in hospitality and plant and machinery finance. Different lenders have different appetites for new ventures, specific equipment types, or loan sizes. One might cap hospitality fit-outs at $100,000, while another will go to $500,000 for the right operator.

This also applies if you need vehicle finance for delivery vans or truck and trailer loans for catering or mobile operations. Packaging equipment and vehicles together can sometimes improve your rate and reduce administration.

Call one of our team or book an appointment at a time that works for you. We'll talk through your equipment list, trading position, and timeline, then match you with lenders who actually fund hospitality fit-outs and upgrades across Australia.

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