Opening or growing a restaurant in Mississauga, Brampton, or anywhere in Ontario requires more than great recipes and prime location. You also need reliable, high-quality equipment—like commercial ovens, refrigeration units, and POS systems—to keep your kitchen running smoothly. Purchasing all this gear upfront can be expensive, often totaling tens of thousands of dollars. That’s where business loans for restaurant equipment come in.
With the right financing, you can spread the cost of essential appliances and furnishings over months or years, preserving cash flow for daily needs like rent, payroll, and inventory. Mehmi Financial Group specializes in connecting restaurant owners with flexible equipment loans, leases, and vendor financing options that fit their budget and growth plans.
Why Finance Restaurant Equipment?
Preserve Working Capital
- Keep Cash Available: Instead of spending $20,000–$50,000 up front on ovens, fridges, and dishwashers, you pay small monthly amounts. This frees cash for ingredients, staff wages, and marketing.
- Handle Emergencies: If your walk-in freezer breaks down or your espresso machine needs replacement, having financing in place ensures you can fix or replace equipment quickly—avoiding costly downtime.
Upgrade to Better Equipment
- Energy-Efficient Models: Newer equipment often uses less energy and reduces utility costs. Financing lets you access these upgrades without waiting years to save enough money.
- Latest Technology: Leasing or loaning for POS systems, kitchen automation, and modern prep tools helps you serve customers faster and reduce waste.
Tax Benefits
- Interest Deduction: The interest portion of your loan payments can often be deducted as a business expense, reducing your taxable income.
- Capital Cost Allowance (CCA): You may claim depreciation on financed equipment, writing off a portion of the asset’s value each year. Consult your accountant to maximize these tax savings.
Flexible Repayment Terms
- Choose Your Term Length: Most lenders offer equipment loans for 12 to 60 months. Shorter terms mean higher monthly payments but less total interest; longer terms lower monthly repayments but increase interest costs.
- Seasonal Payment Options: If your restaurant’s revenue dips in certain months (e.g., summer vacation), some lenders allow lower payments during slow periods.
For a detailed look at your options, learn more about our services.
What Can You Finance?
Restaurant equipment loans can cover nearly any physical asset needed in daily operations. Common categories include:
- Cooking Equipment:
- Commercial ovens, ranges, and grills
- Deep fryers, griddles, and steamers
- Food warmers and salamanders
- Cold Storage:
- Reach-in and walk-in refrigerators and freezers
- Undercounter fridges, blast chillers, and prep tables with built-in refrigeration
- Cleaning & Sanitation:
- Commercial dishwashers and glasswashers
- Triple-sink stations, pre-rinse faucets, and drainage racks
- Grease traps and sanitation systems
- Technology & POS Systems:
- Point-of-sale terminals and tablets
- Kitchen display systems (KDS) and order printers
- Inventory management software and reservation systems
- Beverage Equipment:
- Espresso machines, coffee brewers, and grinders
- Bar blenders, juicers, and beverage dispensers
- Ice machines and kegerators
- Prep & Furniture:
- Food processors, mixers, and slicers
- Prep tables, cutting boards, and workstations
- Chairs, tables, booths, and bar stools
- Specialty & Mobility:
- Buffet stations, display cases, and carving tables
- Delivery vans, food trucks, and catering trailers
If your restaurant needs it, there is likely a way to finance it. For examples of restaurant financing solutions, check our industry expertise.
Types of Restaurant Equipment Financing
1. Equipment Loans
- How It Works: You borrow a lump sum to purchase specific equipment. You repay that amount, plus interest, in fixed monthly installments over an agreed term (usually 1 to 5 years).
- Key Benefits:
- Full ownership after final payment.
- Fixed interest rates mean predictable monthly payments.
- No mileage or usage limits (unlike some leases).
2. Equipment Leasing
- How It Works: You rent equipment for a set monthly fee. At lease-end, you may return the equipment, upgrade to newer models, or buy it at a residual value.
- Key Benefits:
- Lower initial costs compared to buying.
- Easier to upgrade to the latest technology every few years.
- Monthly payments may be fully tax-deductible as an operating expense.
3. Vendor Financing
- How It Works: Some equipment manufacturers and dealers offer in-house financing or partner with lending institutions to provide loans directly at the point of sale.
- Key Benefits:
- Convenience of financing while you shop.
- Potential promotional rates or deferred payment offers.
- May include bundled maintenance or extended warranties.
Before choosing vendor financing, compare terms with bank loans or leasing to ensure you get the best rate and flexibility.
Who Can Qualify for Restaurant Equipment Loans?
While each lender has its own criteria, most evaluate these core factors:
- Time in Business:
- Lenders usually prefer restaurants that have been open for at least 6–12 months. If you’re brand-new, partner with a co-signer or show a solid business plan to improve your odds.
- Monthly or Annual Revenue:
- Provide recent bank statements or a profit & loss summary. Steady cash flow indicates you can meet monthly payments.
- Credit Score:
- A personal or business credit score of 650+ unlocks the best interest rates. If your score falls between 600 and 650, you may still qualify but at a slightly higher APR. Scores below 600 may require a larger down payment or an experienced co-signer.
- Down Payment:
- Many lenders offer 100% financing, but putting down 10–20% reduces your loan balance and monthly payments. A larger down payment can also help if your credit is less than ideal.
- Collateral:
- Most restaurant equipment acts as its own collateral—if you default, lenders can repossess the machinery. This reduces risk and often means lower rates compared to unsecured loans.
- Insurance & Maintenance Plans:
- Some lenders ask for proof of maintenance schedules or extended warranties to ensure the equipment retains value throughout the loan term.
Even if you operate a small café or mobile food truck, you can still qualify for financing. Mehmi Financial Group specializes in helping restaurants of all sizes get approved. Learn how we help food service businesses grow.
How to Apply: Step-by-Step Guide
Step 1: Estimate Your Equipment Needs
- List Must-Have Items: Prioritize essential items—ovens, refrigerators, dishwashers—then identify nice-to-haves like POS terminals or specialty beverage equipment.
- Get Quotes: Contact at least three reputable suppliers or dealers for price estimates and model comparisons.
Step 2: Check Your Credit and Gather Documents
- Review Your Credit Report: In Canada, you can request a free copy of your Equifax or TransUnion report once per year.
- Collect Key Documents:
- Business registration or Articles of Incorporation.
- Recent business bank statements (last 3–6 months) or personal statements if you’re a sole proprietor.
- Profit & Loss statement or summary of sales and expenses.
- Personal and business tax returns (last two years).
- Photo ID (driver’s license or passport) and Social Insurance Number (SIN).
- Supplier quotes or pro forma invoice for the equipment you wish to finance.
Having these ready as clear PDFs or scans helps speed up the approval process.
Step 3: Compare Lending Options
- Online & Alternative Lenders: Fast underwriting, approvals in as little as 24–48 hours, credit scores acceptable down to 600, but rates may range from 10–25% APR.
- Credit Unions & Community Banks: Approvals typically take 3–5 business days, rates from 7–12% APR, and often more flexible with seasonal payment schedules.
- Traditional Banks: If you have a strong banking history and a credit score above 680, you may qualify for lower rates (5–9% APR) with approvals in 1–2 weeks.
Use pre-qualification tools on lender websites or work directly with Mehmi Financial Group to see multiple offers without impacting your credit.
Step 4: Submit a Complete Application
- Fill Out the Online Form: Enter accurate business information, including legal name, address, and annual revenue.
- Upload Documents: Attach PDFs or photos of all required documents. Label each file clearly (e.g., “2024_Tax_Return.pdf”).
- Provide Equipment Details: Include make, model, year, and cost of each item you want to finance.
An application is only as fast as the information you provide—double-check all entries before submitting.
Step 5: Respond Quickly to Follow-Up Requests
- Monitor Your Email & Phone: Lenders often request additional bank statements or clarifications on your cash flow.
- Reply Within 24 Hours: A swift response keeps your application on track and can lead to same-day or next-day approval.
Step 6: Review and Sign Your Offer
- Confirm Key Terms:
- Loan amount matches your equipment cost minus any down payment.
- APR and term length align with your pre-qualification rates.
- Monthly payment schedule matches your cash flow cycle (weekly, bi-weekly, or monthly).
- Fees (origination, administration, or late-payment) are clearly disclosed.
- Sign Electronically or In Person: Many lenders allow e-signature for quick turnaround. If paper is required, scan and email back promptly.
Step 7: Receive Funds and Purchase Equipment
- Disbursement Method: Funds typically go directly to your bank account within 1–3 business days. Some lenders issue a cheque payable to the supplier or dealer.
- Complete the Purchase: Use the funds to pay the vendor in full. Schedule delivery and installation.
- Keep Proof of Purchase: Save your purchase invoice, delivery receipt, and any installation or maintenance documentation. Lenders may request these to confirm the equipment was obtained as intended.
Once installed, the equipment is yours to operate and maintain—just remember to keep making on-time payments.
Tips for Successful Restaurant Equipment Financing
- Only Finance What You Need: Avoid borrowing more than required to prevent excess debt and interest costs.
- Shop Around: Rates and terms vary widely. Comparing at least three lenders ensures you get the best deal.
- Maintain Good Credit: On-time payments help build your credit profile, making future financing easier and cheaper.
- Budget for Maintenance: Allocate 5–10% of monthly revenue for routine servicing. Well-maintained equipment lasts longer and keeps your restaurant running smoothly.
- Leverage Tax Deductions: Work with your accountant to claim interest and depreciation, maximizing your tax savings each year.
FAQ for Restaurant Equipment Business Loans
1. What kinds of equipment can I finance with a business loan?
You can finance almost any restaurant-related asset, including commercial ovens, ranges, refrigerators, dishwashers, POS systems, furniture, and even delivery vans or food trucks. If it’s used in daily operations, there’s likely a financing option available.
2. Does getting a restaurant equipment loan require good credit?
While a credit score of 650 or higher unlocks the best rates, many lenders work with scores down to 600. If your score is lower, you may qualify with a larger down payment or a co-signer. Mehmi Financial Group can connect you with lenders who offer flexible programs for fair credit.
3. What paperwork do I need to apply for a loan?
- Business registration or Articles of Incorporation
- Recent business bank statements (last 3–6 months) or personal statements if you’re a sole proprietor
- Profit & Loss statement or summary of sales and expenses
- Personal and business tax returns (last two years)
- Photo ID and SIN
- Supplier quotes or invoice for the equipment you wish to finance
Having these ready as PDFs speeds up approval.
4. Is financing or leasing restaurant equipment better?
- Financing (Equipment Loan): You own the equipment once the loan is paid off. Ideal for equipment that holds value or is essential long-term.
- Leasing: You rent the equipment and may return it or upgrade at lease-end. Great for quickly depreciating items or when you want to avoid large down payments.
Choose based on your cash flow, how long you plan to use the equipment, and whether you prefer ownership.
5. How much can I borrow to buy equipment for my restaurant?
Loan amounts vary by lender but typically range from $5,000 up to $250,000 or more, depending on your credit profile, down payment, and revenue. For large-scale purchases—like multiple ovens or a food truck—vendors sometimes offer higher limits.
6. Does financing restaurant equipment have tax advantages?
Yes. You can often deduct the interest portion of your loan payments as a business expense. Additionally, you may claim Capital Cost Allowance (CCA) to depreciate the equipment’s value over time. Always consult your accountant to maximize these benefits.
Ready to outfit your restaurant with top-quality equipment without draining your cash flow? Mehmi Financial Group offers fast approvals, competitive rates, and tailored solutions for all credit types. Whether you need a new commercial oven, a walk-in cooler, or a complete kitchen overhaul, we’ll match you with the right financing option.
Let us help you equip your kitchen with confidence and ease!
.png)