Restaurant equipment loan rates currently range from 6% to 30% APR depending on your credit score, time in business, loan amount, and lender type—with established restaurants qualifying for the lowest rates while startups typically pay higher premiums or require collateral.
Key Takeaways
- Current rate environment: Restaurant equipment financing rates vary widely depending on lender type, credit profile, and collateral. Government-backed options like SBA 7(a) loans can offer more competitive rates for qualifying equipment purchases.
- Credit score impact: Borrowers with 700+ credit scores generally qualify for better loan terms than borrowers with lower scores, consistent with credit-based pricing principles.
- Down payment flexibility: Many equipment loans allow low or no down payment, though 10%–20% down often leads to stronger approvals and better terms.
- Approval speed varies: Traditional bank loans may take several weeks to process, while alternative finance channels can approve and fund more quickly—sometimes within days.
- Tax advantages exist: Under IRS Section 179, restaurants can deduct the full purchase price of qualifying equipment in the year it is placed into service.
Restaurant Equipment Financing: By the Numbers
| Key Metric | Data |
| Average Restaurant Buildout Cost | $250,000–$500,000+ with equipment as one of the largest expenses |
| Financing Reliance | Restaurants often rely on external financing to support major equipment purchases due to high upfront costs |
| Market Growth | U.S. equipment financing activity has grown in recent years as businesses increase capital expenditures |
| Typical Loan Amounts | Tens of thousands to several hundred thousand dollars |
| Average Loan Terms | 2–7 years for equipment financing |
| Equipment Investment Impact | Restaurants investing in equipment upgrades achieve higher productivity and improved capacity |
What Are the Best Lenders for Restaurant Equipment Loans for New Restaurants?
New restaurants face unique challenges when securing equipment financing. You’re asking lenders to bet on a business with limited track record in an industry known for high failure rates. But here’s the good news: multiple lender types specialize in helping new restaurants get the equipment they need.
Best Lender Types for New Restaurants
| Lender Type | Rate Range | Best For | Key Advantage | Main Drawback |
| SBA Lenders | 6%–13% | Patient borrowers with strong personal credit | Lowest rates available | 30–90 day approval |
| Traditional Banks | 6%–15% | Established restaurants (12+ months) | Relationship banking benefits | Strict requirements |
| Online Lenders | 15%–30% | Fast funding needs | Approval in 24–72 hours | Higher rates |
| Equipment Specialists | 8%–25% | New restaurants | Equipment as collateral | Industry-specific |
| Credit Unions | 7%–18% | Members | Personal service | Membership required |
Ready to explore your options? Compare equipment financing solutions tailored to restaurants.
Compare Top Providers Offering Restaurant Equipment Loans with Fast Approval
Speed matters when you’re launching a restaurant or replacing critical equipment. A broken oven or refrigerator can shut down your kitchen—you need financing that moves quickly.
Speed-to-Funding Comparison
| Lender Type | Typical APR Range | Approval Time | Funding Speed | Best For |
| Traditional Banks | 6%–15% | 2–8 weeks | 1–2 weeks | Established restaurants with strong credit |
| SBA Loans | 6%–13% | 30–90 days | 1–2 weeks | Long-term equipment purchases |
| Online Lenders | 15%–30% | Same day–3 days | 24–72 hours | Fast funding, flexible credit |
| Equipment Financing Companies | 8%–25% | 1–5 days | 3–7 days | Equipment-specific expertise |
| Credit Unions | 7%–18% | 1–3 weeks | 1 week | Member-focused service |
What Speeds Up Approval?
Complete documentation is the single biggest factor in faster approvals. Lenders can’t move forward until they have everything they need. Having your paperwork ready before you apply eliminates the back-and-forth that delays most applications.
Equipment quotes or invoices help tremendously. When lenders see exactly what you’re purchasing and its cost, they can evaluate the deal more quickly. Vague “I need money for equipment” requests take longer to process.
Strong credit accelerates everything. Borrowers with scores above 700 move through underwriting faster because lenders need less additional documentation to compensate for credit risk.
Existing banking relationships matter more than you’d think. If you already bank with an institution and have a history of responsible account management, you’ll get approved faster than a brand-new applicant.
Need funding fast? Schedule a 10-minute call with a funding specialist.
Find Restaurant Equipment Loan Programs with Low Interest Rates for Small Business Owners
Getting the lowest possible rate requires understanding what drives pricing and how to position your application for success.
SBA Programs: The Gold Standard for Low Rates
SBA 7(a) loans can finance equipment purchases up to $5 million with rates typically between 6%–13%. These loans work for both new equipment purchases and business acquisitions that include equipment. The SBA guarantee reduces lender risk, which directly translates to lower rates for you.
SBA 504 loans focus on fixed assets, including equipment that has a useful life of at least 10 years. Rates are even lower—often 6%–10%—but these loans are structured differently. You’ll have two lenders: one providing 50% of the project cost, the SBA providing 40%, and you bringing 10% down payment.
Credit Union Advantages
Credit unions operate as not-for-profit institutions, which means they can offer rates 1–3 percentage points lower than comparable for-profit lenders. If you qualify for membership in a credit union that serves your area or industry, it’s worth exploring their business lending programs.
Rate-Reduction Strategies
Make a larger down payment. Putting 20% down instead of 10% can reduce your rate by 0.5–2 percentage points. The math is simple: less risk for the lender means better pricing for you.
Choose a shorter term. A 3-year loan will carry a lower rate than a 7-year loan on the same equipment. If your cash flow can handle higher monthly payments, shorter terms save you money in total interest paid.
Improve your credit before applying. Every 50 points improvement in your credit score can reduce your rate by 1–2 percentage points. If you can wait a few months to clean up credit issues, you’ll save thousands over the loan term.
Bundle with working capital. Some lenders offer lower blended rates when you combine equipment financing with a working capital loan. You get operational flexibility while securing better overall pricing.
Explore low-rate options with working capital loans for restaurants.
How Can I Qualify for Restaurant Equipment Loans with Flexible Repayment Options?
Restaurants have seasonal revenue patterns, slow periods, and unpredictable cash flow. Standard monthly payment schedules don’t always align with how money actually flows through your business.
Seasonal Payment Structures
Some lenders understand the restaurant business cycle and offer seasonal payment options. You might pay higher amounts during your busy season and lower amounts during slow months. This structure matches your payment obligations to your actual revenue patterns.
Ask lenders specifically about seasonal adjustments. Not all lenders offer this, but those experienced with restaurant financing often have flexible structures available.
Deferred Payment Options
For brand-new equipment or restaurant launches, some lenders offer deferred payment periods. You might have 30–90 days before your first payment is due, which gives you time to generate revenue with your new equipment before payments begin.
This matters more than you might think. That first month or two of operation is often cash-flow negative as you build your customer base. Deferred payments provide breathing room.
Balloon Payments vs. Amortized Structures
Fully amortized loans have consistent payments throughout the term, with the loan paid off completely by the end. This is the most common structure and the easiest to budget for.
Balloon payment loans feature lower monthly payments but a large final payment at the end. These work if you plan to refinance or if you expect a cash influx (like selling the equipment or business) before the balloon comes due.
Qualification Checklist for Flexible Restaurant Equipment Financing
- Minimum credit score: Typically 600–680+ depending on lender
- Time in business: Usually 6 months–2 years required
- Revenue documentation: Bank statements, tax returns, or sales records
- Collateral considerations: The equipment itself often serves as collateral
- Personal guarantee: Most lenders require owners to personally guarantee loans
Looking for flexible terms? Discover small business solutions tailored to restaurants.
List of Financing Companies That Provide Restaurant Equipment Loans with No Down Payment
Preserving your cash is critical in the restaurant business. Equipment financing with no down payment keeps more money available for inventory, payroll, marketing, and the hundred other expenses that crop up.
Lender Categories Offering 100% Financing
Online lenders like OnDeck, BlueVine, and Kabbage frequently offer 100% financing for restaurant equipment. They compensate for the higher risk by charging higher interest rates (15%–30%).
Equipment financing specialists such as CIT and Crest Capital often provide no-down-payment options when the equipment itself serves as strong collateral. Commercial kitchen equipment holds value and can be resold if necessary, which makes lenders comfortable with 100% financing.
SBA 7(a) loans can occasionally be structured with no down payment if you have excellent credit and the equipment purchase is part of a larger business acquisition or expansion.
Vendor financing programs directly through equipment manufacturers or dealers sometimes offer 100% financing as a way to move inventory. Terms vary widely, so compare vendor financing against other options.
The Trade-Off: Higher Rates vs. Preserved Cash Flow
Let’s be direct: financing 100% of your equipment cost will typically increase your interest rate by 1–3 percentage points compared to putting 20% down. On a $100,000 loan, this might mean:
With 20% down ($20,000): Borrowing $80,000 at 10% = $1,697/month for 5 years = $21,820 in total interest
With 0% down: Borrowing $100,000 at 12% = $2,224/month for 5 years = $33,440 in total interest
The difference is $11,620 in additional interest over the loan term. But you keep $20,000 in cash available now. For many restaurants, having that cash buffer is worth the additional interest cost.
Is a Down Payment Required for Restaurant Equipment Financing?
Not always—but your choice significantly affects your rate and terms. Here’s when each option makes sense:
Choose no down payment when:
- You need to preserve cash for working capital
- Your restaurant is in launch phase with unpredictable expenses
- You’re financing equipment with strong resale value
- You have other immediate uses for capital that will generate returns
Choose a down payment when:
- You want to minimize interest costs
- You’re well-capitalized and cash isn’t tight
- You want to improve approval odds or secure better terms
- You’re financing equipment with limited resale value
Preserve your capital with equipment financing offering flexible down payment options.
What Interest Rates Are Typical for Restaurant Equipment Loans?
Let’s break down current 2024 rate benchmarks so you know what to expect based on your credit profile and lender choice.
Rate Comparison by Credit Score and Lender Type
| Credit Score Tier | Bank/SBA Rate | Online Lender Rate | Equipment Specialist Rate |
| Excellent (750+) | 6%–10% | 12%–18% | 8%–14% |
| Good (700–749) | 8%–13% | 15%–22% | 10%–18% |
| Fair (650–699) | 12%–18% | 18%–26% | 14%–22% |
| Poor (Below 650) | Often declined | 22%–30% | 18%–28% |
Fixed vs. Variable Rate Implications
Fixed rates stay the same throughout your loan term. Your payment never changes, which makes budgeting straightforward. Most restaurant equipment loans use fixed rates because restaurants need payment predictability.
Variable rates fluctuate based on an underlying index (usually prime rate). Your payment can increase or decrease over time. Variable rates sometimes start lower than fixed rates but carry more risk.
For restaurant equipment financing, we generally recommend fixed rates. The restaurant business has enough variables—your loan payment shouldn’t be one of them.
Understanding Rate Factors
Rate factors are another way lenders express pricing. Instead of APR, they quote a factor like 0.035. Here’s how to convert:
Take the rate factor (0.035) and multiply by 365 days, then divide by your loan term in days. This gives you the approximate APR. Rate factors can be misleading because they make rates seem lower than they actually are.
Always ask for the APR. It’s the true cost of borrowing and the only number that allows you to accurately compare offers.
What’s the Difference Between Leasing and Buying Restaurant Equipment?
This is one of the most important decisions you’ll make about equipment financing. The right choice depends on your specific situation, cash flow, and long-term plans.
Total Cost of Ownership Scenarios
Let’s compare leasing versus buying the same $50,000 commercial oven:
Buying with financing:
- Loan: $50,000 at 10% APR over 5 years
- Monthly payment: $1,062
- Total paid: $63,720
- You own the equipment at the end
- Section 179 tax deduction available
Leasing:
- Lease payment: $900/month
- Term: 5 years
- Total paid: $54,000
- Equipment returned at end (or purchase option at fair market value)
- Lease payments tax deductible
The lease looks cheaper monthly, but if you exercise the purchase option at the end, you’ll pay more total. Plus, you don’t build equity during the lease term.
When Leasing Makes More Sense
Rapidly changing technology is the best argument for leasing. If you’re financing point-of-sale systems, kitchen display systems, or other tech that becomes obsolete quickly, leasing lets you upgrade easily.
Uncertain growth trajectory also favors leasing. If you’re not sure this location will work long-term or if you might need to scale down, leasing provides an exit strategy.
Capital preservation can justify leasing costs. If every dollar of cash needs to go into operations and growth, the lower monthly lease payments preserve working capital even though total cost is higher.
When Buying Makes More Sense
Long-term essentials should almost always be purchased. Commercial ranges, ovens, refrigeration, and other core kitchen equipment will last 10–15 years with proper maintenance. Building equity in these assets makes financial sense.
Tax optimization through Section 179 deductions provides immediate benefits. You can deduct the full purchase price (up to $1.16 million in 2024) in the year you buy the equipment.
Resale value matters for high-end equipment. Quality commercial kitchen equipment holds value. When you eventually upgrade, you can sell or trade in owned equipment—something impossible with leased equipment.
Restaurant Equipment Leasing vs. Financing: Decision Matrix
| Factor | Leasing | Financing/Buying |
| Ownership | No—return at end | Yes—asset on your books |
| Monthly Payment | Often lower | Often higher |
| Total Cost | Usually higher long-term | Usually lower long-term |
| Tax Benefits | Deduct payments as expense | Section 179 + depreciation |
| Flexibility | Upgrade easily | Resale/trade-in possible |
| Best For | Short-term needs, tech equipment | Long-term essentials, high-use items |
Not sure which path is right? Talk to a funding specialist today.
How Fast Can I Get Approved for Restaurant Equipment Financing?
Speed varies dramatically by lender type, and knowing what to expect helps you plan accordingly.
Approval Timelines by Lender Type
Online lenders: Same day to 3 days for approval, 24–72 hours to funding. The entire process can happen in under a week.
Equipment financing specialists: 1–5 days for approval, 3–7 days to funding. These companies move quickly because equipment financing is all they do.
Credit unions: 1–3 weeks for approval, about 1 week to funding after approval. Faster than traditional banks but more thorough than online lenders.
Traditional banks: 2–8 weeks for approval, 1–2 weeks to funding after approval. Banks have more bureaucracy and committee approvals that slow the process.
SBA loans: 30–90 days for approval, 1–2 weeks to funding. The government guarantee requires additional review steps that extend timelines.
Documentation Checklist for Fast Equipment Loan Approval
Having these ready before you apply eliminates the most common delays:
- 3–6 months of business bank statements showing consistent deposits
- Business tax returns (1–2 years if available, not always required for newer businesses)
- Equipment quote or invoice with detailed specifications and pricing
- Business license and formation documents (LLC operating agreement, articles of incorporation)
- Personal identification (driver’s license, Social Security number)
- Financial statements (profit and loss, balance sheet for larger loans)
The restaurants that get funded fastest are the ones who submit complete applications with all documentation upfront. Lenders can’t approve what they can’t review.
Get pre-qualified in minutes—start your application today.
What Credit Score Is Needed for Restaurant Equipment Loan Approval?
Credit requirements vary significantly by lender type, and understanding these thresholds helps you target the right lenders for your situation.
Credit Score Quick Guide
750+: You’ll qualify for the best rates and have access to virtually every lender. Expect rates in the 6%–12% range depending on other factors.
680–749: You’re in good shape with most traditional lenders and will get competitive rates. Expect rates in the 8%–15% range.
620–679: Traditional banks become harder, but alternative lenders and equipment specialists will work with you. Expect rates in the 12%–22% range.
Below 620: Your options narrow to alternative lenders, equipment-secured loans, or leasing. Expect rates in the 18%–30% range.
Business Credit vs. Personal Credit
Most restaurant equipment lenders pull both your personal and business credit. Here’s how they use each:
Personal credit matters most for new restaurants and small loans. Lenders know that business and personal finances are intertwined for small restaurant owners, and they want to see responsible personal credit management.
Business credit becomes more important for established restaurants and larger loans. A strong Dun & Bradstreet, Experian Business, or Equifax Business credit file can compensate for less-than-perfect personal credit.
Building business credit takes time but pays off. Open accounts with vendors who report to business credit bureaus, get a business credit card and use it responsibly, and maintain clean tax compliance. Six to twelve months of this behavior establishes a meaningful business credit history.
How Credit Score Affects Your Rate
The impact is substantial. Here’s a real example:
Borrower A (750 credit score): $100,000 equipment loan at 8% for 5 years = $2,028/month, $21,680 total interest
Borrower B (640 credit score): $100,000 equipment loan at 15% for 5 years = $2,379/month, $42,740 total interest
The difference in credit scores costs Borrower B an extra $21,060 over the loan term—money that could have gone into your business instead.
Can Startups with No Credit History Get Restaurant Equipment Loans?
Yes—but you’ll need to take alternative paths to approval. Lenders can’t evaluate your business if it has no credit history, so they look at other factors.
Alternative Qualification Paths
Equipment as collateral is your strongest leverage. When the equipment itself secures the loan (called a “self-secured loan”), lenders focus less on credit history. The equipment can be repossessed and resold if you default, which reduces their risk.
Personal credit becomes crucial for startups. Lenders will evaluate your personal credit score, personal assets, and personal financial stability. They’re essentially betting on you as an individual, not your untested restaurant concept.
Co-signers improve approval odds dramatically. A business partner or family member with strong credit who’s willing to co-sign makes lenders much more comfortable. The co-signer becomes equally responsible for repayment.
Collateral beyond equipment can secure financing. Real estate, personal property, or other assets can be pledged to secure equipment financing even without business credit history.
Alternative Paths to Equipment Financing for New Restaurants
Equipment-secured loans: The equipment you’re purchasing serves as collateral, which allows approval with minimal credit history.
Personal credit-based approval: Lenders approve based on your personal credit score and financial strength rather than business history.
Vendor financing programs: Equipment manufacturers and dealers sometimes offer financing directly with easier approval than traditional lenders.
SBA microloans: For equipment purchases under $50,000, SBA microloans offer government-backed funding with flexible credit requirements.
Revenue-based qualification: If you’ve been operating for a few months, some lenders approve based on bank account deposits rather than credit scores.
Just getting started? Explore startup-friendly small business solutions.
What Are the Tax Benefits of Financing Restaurant Equipment?
The tax advantages of equipment financing can dramatically reduce your effective cost of borrowing. Understanding these benefits helps you make smarter decisions about when and how to finance equipment.
Section 179 Deduction Explained
Section 179 allows you to deduct the full purchase price of qualifying equipment in the year you buy it, rather than depreciating it over several years. For 2024, you can deduct up to $1.16 million in equipment purchases, with a total equipment spending cap of $2.89 million.
This applies to both financed and cash purchases—as long as you own the equipment (not leasing it), you can take the deduction.
Qualifying equipment includes:
- Commercial kitchen equipment (ovens, ranges, refrigeration)
- Food prep equipment (mixers, slicers, processors)
- Furniture and fixtures
- Point-of-sale systems
- HVAC systems
- Vehicles used for business
Section 179 Deduction Example for Restaurant Equipment
Scenario: You finance $150,000 in commercial kitchen equipment
Section 179 Deduction: Up to $150,000 in year one (within 2024 limits)
Interest Deduction: Annual interest payments also deductible as a business expense
Net Tax Benefit: Consult your CPA, but savings can reach 25%–37% of equipment cost depending on your tax bracket
If you’re in a 30% effective tax bracket, that $150,000 deduction saves you $45,000 in taxes in year one. Combined with the interest deduction, your effective cost of financing drops significantly.
Bonus Depreciation
In addition to Section 179, bonus depreciation allows you to deduct a percentage of equipment costs in the first year. As of 2024, bonus depreciation is being phased down but still provides additional first-year deductions for qualifying equipment purchases.
Interest Deductibility
The interest you pay on equipment loans is tax deductible as a business expense. This reduces the effective cost of borrowing. On a loan with $10,000 in annual interest, a 30% tax rate means you’re effectively paying $7,000 after tax benefits.
Maximize your tax advantages with long-term business loans for equipment.
Can You Get an SBA Loan for a Restaurant?
Absolutely—restaurants qualify for multiple SBA loan programs, and these often provide the best terms available for equipment financing.
SBA 7(a) Loans for Restaurant Equipment
The SBA 7(a) program offers loans up to $5 million for a variety of business purposes, including equipment purchases. Current rates range between 6%–13%, significantly lower than most alternative options.
Restaurant-specific considerations:
- Food service experience strengthens your application
- Detailed business plans are essential for new restaurants
- Personal credit score of 680+ typically required
- Down payment of 10%–20% standard
- Terms can extend up to 10 years for equipment
SBA 504 Loans for Major Equipment Investments
SBA 504 loans work best for major equipment purchases tied to real estate or significant facility improvements. These loans offer even lower rates (6%–10%) but have a more complex structure.
The 504 program provides up to 40% of project costs through an SBA-backed loan, with a conventional lender providing 50% and you bringing 10% down payment. For a $500,000 kitchen renovation, that’s $250,000 from a bank, $200,000 from the SBA, and $50,000 down payment.
Common Misconceptions About SBA Loans
| Myth | Reality |
| SBA loans take forever | 30–90 days with complete docs, 45–60 days typical with experienced lender |
| You need perfect credit | Accepts 640–680+ scores, considers full picture including experience |
| Startups can’t qualify | Explicitly supports startups with strong business plans and personal financials |
Are Equipment Loans Hard to Get for Restaurants?
Equipment loans are actually among the easier types of business financing to secure—even for restaurants. The equipment itself serves as collateral, which reduces lender risk significantly.
Why equipment loans work well: The equipment has tangible resale value, directly generates revenue, and industry-specific lenders understand what restaurant equipment is worth.
What makes approval harder: Poor credit (below 600), no operating history with weak personal financials, unrealistic business plans, or inadequate capitalization.
If you have decent credit (640+), some operating history or industry experience, and realistic projections, equipment financing is very achievable.
Is It Hard to Get a Loan for a Food Truck?
Food truck loans are widely available. The vehicle serves as collateral, which improves approval odds significantly.
Typical terms: Loan amounts between $40,000–$200,000, terms of 3–7 years, rates between 8%–25%.
Food truck-specific lenders: Roaming Hunger Capital, ApplePie Capital, Fora Financial, and equipment lenders like CIT all offer specialized food truck programs.
Ready to launch your food truck? Business expansion loans can fund your mobile kitchen.
How to Choose the Right Restaurant Equipment Financing Option
| Your Situation | Best Options | Rate Range | Why It Works |
| Established restaurant, 700+ credit | Traditional banks, SBA 7(a), Credit unions | 6%–13% | Qualify for lowest available rates |
| New restaurant, 680+ personal credit | SBA 7(a), Equipment specialists, Credit unions | 6%–18% | Personal credit compensates for lack of history |
| Fair credit (620–679) | Equipment specialists, Online lenders, Leasing | 12%–26% | Equipment collateral improves approval odds |
| Urgent equipment needs | Online lenders, Equipment specialists | 15%–30% | Funding in 24–72 hours to 1 week |
| Tight cash flow | Leasing, 100% financing, Seasonal payments | 8%–30% | Preserves working capital |
Need flexible access to capital beyond equipment? Business line of credit provides ongoing funding.
Getting the Best Rate on Your Restaurant Equipment Loan
Restaurant equipment loans offer accessible financing for one of your biggest startup or expansion costs. Rates vary widely based on credit, business age, loan amount, and lender choice—but understanding these factors helps you secure the best terms available for your situation.
The restaurants that get the best equipment financing share common traits: they compare multiple offers, they have organized documentation ready, they understand their credit position, and they know what equipment is truly essential versus nice-to-have.
Don’t settle for the first offer you receive. Rate differences of just 2–3 percentage points can mean thousands of dollars over your loan term. A restaurant financing $200,000 in equipment at 10% versus 13% saves over $18,000 in interest over five years—money that goes directly to your bottom line.
Start your search with lower-rate options like SBA loans and traditional banks if you qualify, but have alternative lenders as backup for speed or flexible credit requirements. And remember: the right equipment financing isn’t just about the lowest rate—it’s about terms that match your cash flow, approval speed that meets your timeline, and a lender who understands the restaurant business.
Take the next step: Schedule your free 10-minute consultation with a funding specialist to explore your restaurant equipment financing options.
Frequently Asked Questions
How do I qualify for a restaurant equipment loan?
Most lenders require a credit score of 600+, 6–12 months in business (or strong personal financials for startups), and proof of revenue or a detailed business plan. The equipment you’re purchasing typically serves as collateral.
What are the best financing options for new restaurant equipment?
SBA loans offer the lowest rates (6%–13%) for qualified borrowers, while online lenders provide faster approval (24–72 hours) for those with less-than-perfect credit. Equipment financing specialists balance competitive rates with industry expertise.
Can I lease used restaurant equipment?
Yes, many equipment financing companies and lessors offer programs for certified pre-owned commercial kitchen equipment. Used equipment leasing typically costs less than new equipment leasing.
What interest rates are typical for restaurant equipment loans?
Current rates range between 6% and 30% APR. Most qualified borrowers pay between 8% and 18% depending on credit score, time in business, loan amount, and lender type.
Is a down payment required for restaurant equipment financing?
No, many lenders offer 100% financing with no down payment. However, putting 10%–20% down typically secures better rates and terms, which saves you money over the loan term.
What’s the difference between leasing and buying restaurant equipment?
Leasing offers lower monthly payments and easy upgrades while buying builds equity and provides Section 179 tax deductions. Buying usually costs less long-term while leasing preserves more cash short-term.
How fast can I get approved for equipment financing?
Online lenders can approve within hours and fund within 24–72 hours. Equipment specialists take 3–7 days while banks and SBA lenders take 2–12 weeks for approval and funding.
What credit score is needed for an equipment loan?
Minimum scores range between 500 (alternative lenders with high rates) and 680+ (banks and SBA loans). Scores of 700+ secure the best rates and terms across all lender types.
Can startups with no credit history get loans?
Yes, through equipment-secured loans (equipment serves as collateral), personal credit-based approval, SBA microloans, or vendor financing programs. Strong personal credit compensates for lack of business history.
What are the tax benefits of financing equipment?
Section 179 allows deduction of the full purchase price (up to $1.16 million in 2024) in the year of purchase. Loan interest is also tax-deductible as a business expense, which reduces your effective borrowing cost.
Is it hard to get a loan for a food truck?
Food truck loans are widely available through equipment specialists and alternative lenders. The mobile kitchen unit serves as collateral, which improves approval odds. Typical amounts range between $40,000–$200,000.
Can you get an SBA loan for a restaurant?
Yes, restaurants qualify for SBA 7(a) and 504 loans offering rates between 6%–13% with terms up to 10 years for equipment. Food service experience and a strong business plan strengthen applications.
Are equipment loans hard to get for restaurants?
Equipment loans are among the easier business financing options because the equipment itself serves as collateral, which reduces lender risk. Restaurants with 640+ credit and some operating history typically qualify.
