Should You Buy Or Lease Your Restaurant Equipment - Econolease

1. Should You Buy Or Lease Your Restaurant Equipment? A Brief Overview When it comes to starting or growing a restaurant business, one of the biggest financial barriers that a restaurant owner faces is the acquisition of essential equipment. The basic restaurant requirements are: refrigeration units, cooking equipment, fryers , dishes and utensils, as well as dining furniture. We all know that the Coronavirus pandemic has changed the food and beverages industry in endless ways, and across the globe, hotels and restaurants have begun to explore different ways to bring in customers and make strategic changes in operation models to make their businesses feasible and profitable. The bottom line is, restaurant equipment is expensive, and this is precisely why equipment leasing is an excellent way to obtain everything you need without spending all your working capital. The fact is that literally any type of restaurant equipment can be leased, be it an ice machine, a dishwasher, a coffeemaker, or even a computer system. It is wise to lease the kind of equipment that breaks down often, depreciates quickly or becomes obsolete every couple of years so you do not own it all, and can it trade it all for new stuff at the end of the lease. In this article, we will bring several points to your attention that will help you decide whether you should lease restaurant equipment or buy it outright.

2. Why Leasing Is a Great Option Restaurant equipment leasing gives you access to the equipment you require in order to operate your restaurant without hitting your cash flow too hard. Rather than paying the full cost of the equipment or make a lump sum a deposit, equipment leasing stretches out your payments over a period of time. This takes off the financial pressure during the initial stages of running your restaurant and gives you the opportunity for further investment and into growth. Even though restaurant equipment leasing is quite a popular option for restaurant owners, it is not always the best option. It is suitable when cash is tight, and only for specific situations as it can cost you much more, over the long run, instead of buying the equipment outright. Benefits Of Leasing Restaurant Equipment 1. Leasing Equipment Can Be Tax-Deductible More often than not, your lease payments on the equipment are tax deductible as they are a business operating expense. When you purchase the equipment, you have no other way but to pay taxes upfront, whereas, in the case of leasing restaurant equipment, you will pay a small amount of tax every month instead of paying them in a large lump sum. This helps in negating the overall cost of the equipment. Keep in mind, you will not be able to take a tax deduction for depreciation on the equipment with leasing. 2. Better Choice For Short Term Equipment Needs If you are just starting your restaurant, you will definitely want to go with more affordable option, especially before knowing how many customers, on average, will you have every day and how much money your establishment will generate. However, keep in mind that you should check your lease contract meticulously for your end-of-lease options, as you do not want to incur more costs at the end of the lease. 3. Access To More Equipment With Less Capital When you lease the equipment, you get access to the equipment you need in order to get your business started, even if you do not have enough cash to work with. You may be able to afford monthly payments even if you are not able to afford a large lump sum

3. purchase. It is also not 100% necessary for you to have the best credit score for equipment leasing. This particular factor proves to be extremely beneficial for many restaurant owners. What To Look Out For When Planning To Lease The Equipment? 1. Interest Rates May Vary It goes without saying that different restaurant equipment leasing companies offer different interest rates, however, you will be surprised to see how much they can differ. Be sure to shop around, and use one that offers good rates and have great reviews. 2. You May Be Able To Obtain The Equipment For Free Sometimes, food suppliers may lease their equipment free of cost in exchange for becoming your official supplier. Just ask! 3. Length Of Your Lease Agreement Be sure to go through all the ins and outs of your lease agreement, like how long the lease will be and what will happen if you plan to change the terms of the agreement before your lease ends. EndNote Buying new equipment for your restaurant is definitely an investment in your business but is not always possible. Therefore, it is essential that you weigh your options reasonably before making a decision. Upon settling on which option you go for, we suggest you learn everything that you can about equipment leasing as well as buying, and make sure that you are making an informed decision for your business. Restaurant equipment leasing comes with its own share of advantages and disadvantages, however, if you are aware of all of the factors, it will definitely help you make the right decision. If you are planning on equipment leasing in Canada, then we, recommend Econolease, as they reputable and have been in the leasing business for many years. Their extraordinary team of experts will guide you all the way from the beginning to the end.