Quick answer
Hospitality equipment finance spreads the cost of commercial kitchen, bar and front-of-house gear over a set term, usually with the equipment itself as security. It suits cafés, restaurants, pubs, caterers and food trucks replacing or adding equipment. Lenders look at banked takings, the lease on the premises, the supplier quote and whether the item holds resale value. Used or custom gear may need extra security.
Key points
- Commercial ovens, refrigeration, coffee machines and glasswashers are classic financeable assets.
- The premises lease often matters as much as the equipment, because built-in gear can't easily move.
- Takings that reach the bank are what lenders size repayments against.
- Custom fit-out work holds little resale value, so it's often funded differently to stand-alone equipment.
- Typical assets
- Ovens, cool rooms, coffee machines, bars
- Main security
- The equipment, sometimes plus property
- Lenders focus on
- Banked takings, lease term, quote
- Structures used
- Chattel mortgage, lease, loan
When a combi oven dies on a Friday night, nobody in the kitchen is thinking about finance structures. But the way you pay for its replacement matters for months afterwards. Hospitality equipment finance lets a café, restaurant, pub or caterer buy or lease commercial gear and pay for it from the takings it helps generate, rather than draining the cash that covers wages and suppliers.
This page explains how it works in practice, what a lender wants to see from a food and beverage business, and where it fits alongside fit-out funding, leases and unsecured lending.
What kinds of hospitality equipment can be financed?
Almost anything with a serial number, a supplier invoice and a life longer than the finance term. In practice, the most common requests are:
- Cooking equipment: combi ovens, pizza ovens, char grills, fryers, induction ranges and woks.
- Refrigeration: cool rooms, freezer rooms, under-bench fridges, display cabinets and blast chillers.
- Coffee and beverage: espresso machines, grinders, water filtration, beer systems, keg rooms and ice machines.
- Cleaning: pass-through dishwashers and glasswashers.
- Front of house: point-of-sale terminals, furniture and outdoor heating.
- Mobile kitchens: food trucks and trailers, which are often financed more like a vehicle.
Stand-alone items that can be unbolted and resold are the easiest to fund because the lender can recover them if things go wrong. Items built into the walls are a different story, which is why the line between equipment and fit-out matters (more on that below).
How does hospitality equipment finance work?
The supplier quotes the equipment. The lender pays the supplier. You make regular repayments over an agreed term, and the lender holds an interest in the equipment until the finance is cleared. That interest is recorded on the national Personal Property Securities Register, which is how lenders protect themselves across Australia.
The three structures you’ll come across most often:
| Structure | Who owns the gear during the term | Typical fit |
|---|---|---|
| Chattel mortgage | You, from day one | Owners keeping equipment for its full working life |
| Finance or operating lease | The financier | Venues that upgrade regularly or want gear off the balance sheet |
| Unsecured business loan | You, with no charge over the item | Small amounts, used gear or mixed purchases |
Some owners also fund a larger refit through a property-secured loan, especially when the purchase includes building work. Our equipment finance overview explains the general mechanics in more depth if you’re comparing across industries.
What do lenders look at for a café, restaurant or bar?
Hospitality has a reputation with lenders: high turnover, slim margins and a lot of businesses that change hands. A good application gets ahead of those concerns.
Banked takings. Card sales hit your account every day, which helps. Cash that never reaches the bank is invisible. Six to twelve months of statements showing steady deposits is the single strongest thing you can provide.
Your cost structure. The ATO publishes small business benchmarks for restaurants, covering cost of sales, labour, rent and other expenses as a share of turnover. Lenders don’t treat them as a pass mark, but a venue sitting well outside the usual range will be asked why.
The lease. If the oven is going to be in your kitchen for five years, the lender wants to know you’ll be there too. Remaining term plus options is checked on most applications.
The quote. A clear quote from an established supplier, with model numbers, installation and delivery separated out, makes the lender’s job easy.
Existing debts. Supplier accounts on stop or a growing tax debt don’t automatically end the conversation, but they need to be disclosed. ATO debt is considered case by case.
If your venue ticks most of those boxes, it’s worth taking a minute to check whether you qualify before you sign the supplier’s order.
Equipment or fit-out: why does the difference matter?
A lender can repossess and resell a commercial dishwasher. It can’t do much with a polished concrete bar, custom joinery or a ducted exhaust system cut to fit your ceiling. That’s why built-in work is usually treated as fit-out finance rather than equipment finance.
The practical effect: a project that mixes both is often split. The movable equipment is funded against itself, and the building work is funded with an unsecured facility sized on turnover or a loan secured against property. Property-secured business loans run from $20k to $5m and can cover a whole refit in one facility, which some owners prefer to juggling two or three.
What does it cost, and how are the numbers set?
There’s no single price for hospitality equipment finance, because every deal is priced on the business in front of the lender. The things that move the cost:
- Age and type of equipment. New, branded, easy-to-resell items carry less risk than used or custom gear.
- Trading history. A venue with two years of stable takings is priced differently from one that opened last spring.
- Deposit and balloon. Paying a deposit reduces the amount financed. A balloon (a lump sum at the end) lowers regular repayments but leaves a bigger payment to plan for.
- Fees. Expect an establishment or documentation fee, and possibly a PPSR registration fee. Ask for every fee in writing.
- Term. Matching the term to the realistic working life of the gear avoids paying for an oven long after it’s been replaced.
On the tax side, small businesses with aggregated turnover under $10 million may be able to use the ATO’s instant asset write-off for eligible assets costing less than $20,000 that are first used or installed ready for use on or after 1 July 2023. GST treatment also differs between a purchase and a lease, as the ATO’s hire purchase and leasing guidance explains. Your accountant can tell you which suits your BAS cycle.
Illustrative example
Illustrative example: A neighbourhood restaurant doing a steady dinner trade wants to start a weekend lunch menu. The kitchen needs a second combi oven, a blast chiller and a bigger dishwasher, quoted at $68k installed. The lease has six years left plus an option, and twelve months of banked takings show consistent growth. The owner finances the equipment through a chattel mortgage over five years with a small deposit, keeping the cash reserve intact for the extra lunch staff. The new menu covers the repayments from its first full month of trading.
What are the common mistakes?
- Signing the supplier’s finance form without comparing. Convenient, but not always the best structure for your business.
- Financing gear beyond the lease. A seven-year term on a site with three years left is a problem waiting to happen.
- Lumping fit-out into equipment finance. It often gets declined or downsized late in the process.
- Ignoring the balloon. A low weekly figure with a large final payment can bite in a quiet winter.
- Applying with unbanked cash. Bank everything for a few months before you apply.
The industry finder shows how lenders view other food businesses, including cafés and restaurants, and the secured or unsecured check helps you decide what to offer as security.
Is your kitchen ready for an upgrade?
If you’ve got a quote in hand and takings in the bank, you’re already most of the way there. Telling us about it takes roughly a minute, and enquiring doesn’t trigger a credit check. Your details aren’t fired off to a long list of lenders hoping one bites; a real person reads what you’ve sent, thinks about the right structure for your venue and gives you a call. The more accurately you fill in the form (turnover, the equipment, whether you own property), the more likely the first option we raise is the right one.
Frequently asked questions
Can I finance second-hand commercial kitchen equipment?
Often, yes, though fewer lenders will do it and the terms can be shorter. Used gear needs a clear description, serial numbers where available and an invoice from a genuine seller. If the item is old or hard to value, a lender may want additional security or suggest an unsecured facility instead.
Does the length of my lease affect equipment finance?
Yes. A lender wants the business to still be trading from the site for the life of the finance. Built-in items such as cool rooms, exhaust canopies and bar counters are especially tied to the premises, so a short lease with no option can limit the term or amount offered.
Can I include installation and delivery in the finance?
Installation, delivery and commissioning can usually be included when they're on the supplier's invoice with the equipment. Separate building work, plumbing and electrical upgrades are more often treated as fit-out and may be funded through a different product.
Is leasing better than buying a coffee machine?
It depends on whether you want to own the machine at the end. A lease suits owners who like to upgrade on a cycle and keep repayments predictable. Buying through a chattel mortgage suits owners who plan to keep the machine for years and want it on their own balance sheet.
Can a new restaurant get equipment finance?
It's harder without trading history, but not impossible. Lenders will lean more heavily on your experience in hospitality, any deposit you contribute and whether you or a director can offer property as security.
What happens if the equipment breaks down during the finance term?
The repayments continue, because the finance is separate from the warranty. That's why it pays to check the warranty period and service arrangements before you sign, and to keep a small cash buffer for repairs.