Finance for cafes and restaurants: fit-outs, equipment and vehicles

Opening or upgrading a cafe or restaurant is capital-hungry. Ovens, cool-rooms, coffee machines, a full fit-out, maybe a delivery van. Paying cash for all of it drains the buffer you need for the first few trading months, which is exactly when most venues are tight.

Financing the gear keeps that cash in the business. This guide covers what lenders fund easily in hospitality, what is harder and why, and how to structure it. We are a finance broker, not a lender, so we take one application across a panel of more than 40 lenders to find the right fit.

What finances easily

Standalone commercial equipment with a clear resale market is the easiest to fund: ovens, fridges and freezers, dishwashers, coffee machines, and cooking lines. Lenders can see a second-hand value, so these go through cleanly, often on a chattel mortgage or a lease. The same applies to a delivery van or vehicle, which is one of the most liquid assets to finance.

What is harder, and why

Fit-outs are the tricky part. Joinery, shopfronts, cool-room builds and custom interiors have weak resale value, because a lender cannot easily pull out and resell a fitted kitchen. So fit-out finance often comes with a deposit, a shorter term, or a need for asset-backing (a property-owning director). It is very doable, but expect a tighter structure than for standalone equipment. A practical approach is to split the deal: finance the resaleable equipment cleanly, and structure the fit-out portion separately.

Structures that suit hospitality

• Chattel mortgage: own the equipment, claim depreciation and the interest, and bring the GST credit forward. Good for gear you will keep.
• Lease or rental: useful for equipment you want to upgrade often, or to keep upfront cost low while you build trade.
• Operating lease: for fast-dating items where you would rather use and return than own.

Which one fits depends on your tax position and how long you will keep the asset. See our guide to business equipment finance structures, and browse hospitality finance.

Getting approved

Hospitality has a reputation for being higher-risk, so lenders look closely at time in business, the director's experience, and asset-backing. A new venue run by an experienced operator who owns property is a very different application to a first-time owner with a thin file. If you do not have full financials, low-doc options exist. See how to get approved, and if you are just opening, finance for a new business.

The tax angle

Used in the business, equipment finance brings real deductions. On a chattel mortgage you claim depreciation and interest, and eligible items under the current instant asset write-off threshold may be deductible in the year they are first used. Financing does not disqualify you. Confirm the current rules with your accountant, and see our tax guide.

This is general information only and not financial, credit, or tax advice. Tax rules and thresholds change. Consider your own circumstances and speak to a professional. All finance is subject to lender assessment and approval.

This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.