Does Your Business Need To lease Finance New or Used Restaurant Equipment?
Restaurant equipment leasing can be one of the more challenging type of commercial lease financing you can try to arrange, depending on the age and performance of your business.
For a well established business with good historical cash flow, the available lease financing options for restaurant equipment can be comparable to other types of assets.
But for start up situations and businesses that do not show a lot of net cash flow and profit in their annual financial statements, the equipment leasing process can be more of a struggle.
And regardless if the business is doing fairly well on a cash transaction basis, at the end of the day lease financing decisions are based on the reported income that shows up in your annual tax filings.
For start ups and weak cash flow situations, the lease to asset value is typically around 50%. As the financial strength of the business increases, so does the lending ratio that can be secured.
Get Restaurant Equipment Leasing That Meets Your Business Needs
Used restaurant equipment can also be lease financed, but the rates and repayment terms will be tighter than with new equipment due to the liquidation value that a leasing company is likely to receive in the market for used equipment in the event of a lessee default.
For this type of asset, cash flow is definitely the king and key to getting the financing you prefer for the rates and terms that will work the best for your future cash flow.
Equipment leasing is provided in the form of operating and capital leases. An operating lease does not require the lessee to purchase the restaurant equipment at the end of the lease term or pay further on the assets. A capital lease requires purchase of the assets at the end of the lease term for a predefined price.
There are several end of lease options that can be explored for restaurant equipment leasing to fit the needs of each applicant.
If you have some new or used restaurant equipment that you’d like to acquire through an equipment leasing program, I suggest that you give us a call so we can quickly assess your requirements and provide equipment leasing options for your consideration.