20 Feb 2020 | Catering Equipment

How Catering Equipment Financing Options Work

How Catering Equipment Financing Options Work

Opening a new kitchen or upgrading your current equipment can be expensive and affect your cash flow. You may want to consider finance options. Let's take a look at how hospitality financing options, like Silver Chef, work.

We also recommend you check out our complete guide to Buying Commercial Catering Equipment.

Opening a new kitchen or upgrading your current one can be expensive. It’s easy for your budget to get out of hand as the list of items you need gets longer and longer. When it comes to paying for your catering equipment, you may want to consider finance options.

Is Financing Right For You?

If you’re considering finance, you should spend time assessing your budget first so you have a good idea of how much you will need to borrow to establish your new commercial kitchen.

Silver Chef Hospitality Industry Financing

Silver Chef is the only specialised hospitality equipment funder in Australia and comes highly recommended. How it works is simple.

You'll get a 12-month rental agreement which lets you try your equipment before you buy. The low weekly payments are hugely beneficial to those just starting out, as working capital can go towards other needs such as hiring staff.

The weekly payments are also 100% tax deductible and off-balance sheet, meaning it won’t have an impact on any future borrowing.

Within the 12-month agreement, you have the flexibility to upgrade or add more equipment at any time.

For example, if you decide your 2 Group coffee machine isn’t keeping up with your customers thirst for coffee, you can replace it with a 3 Group machine and the weekly payments will be adjusted.

You can also purchase your equipment at any time within the 12 months, and you'll receive a 75% net rental rebate on your payments to date.

After the 12 month lease period, you have a few options:

Continue to Rent

If you want to keep your options open, you can continue leasing the equipment, and the purchase price will continue to drop with each weekly payment. Alternatively, you can commence a new 12-month agreement with the same options as the first agreement but with a 10% discount on your weekly payments.

Buy Your Catering Equipment

If you know the equipment is right for you and you’re in a financial position to pay, you can purchase. You’ll receive a 75% net rental rebate on your payments made in the first year.

Easy Own

If you want to keep working towards owning the equipment, you can pick the Easy Own® option. Choose a 30% discount on your weekly payments on a 36-month contract or a 15% discount on your weekly payments on a 24-month contract.

Return Your Catering Equipment

If you decide the equipment no longer suits your needs, simply return it with no further commitment.

Silver Chef Rental Calculator

The Silver Chef website has a handy Rental Calculator. This allows you to calculate your estimated weekly rental payment based on your equipment costs.

Another feature of using Silver Chef to keep your costs down is the option to opt for certified used equipment instead of brand new. This professional grade equipment is often still under 18 months old when it is returned to the company.

All used equipment is professionally cleaned, refurbished and tested to ensure it meets Certified Used standards. You can choose this equipment through the Rent-Try-Buy scheme as well to help keep your payments low.

Cash Payments on Catering Equipment

If you are lucky enough to be able to purchase your catering equipment up front, this is an excellent position. Cash allows for freedom from weekly repayments and interest.

It’s still useful to know that there are flexible and affordable finance options out there, along with advice and support from experienced suppliers. Some clients opt for finance as it allows for upgrades. Other’s enjoy freeing up the initial cash for other investments such as marketing. If you have the upfront cash, still it is still worth considering the benefits financing brings.

Understanding Your Unique Situation

Every situation is unique with many external factors to be considered. Make sure you create a detailed Feasibility Study that carefully considers your economic environment, potential customers (and how much they are willing to pay) and current budget.

Before you set up a financing plan or paying for equipment upfront, you need to be confident you have covered all your bases and won’t be caught out by unexpected costs. The best way to be sure of this is to speak to your local supplier who can work with you to provide a tailored plan.