10 Ways to Finance Restaurant Kitchen Equipment

Chattel Mortgage Lets You Claim the Full Asset

A chattel mortgage lets you own the equipment from day one and claim GST upfront on the purchase. You borrow to buy a combi oven or blast chiller, the lender registers a mortgage over it, and you make fixed monthly repayments until it's paid off. The GST gets claimed in your next BAS, which gives you a working capital boost right when you need to settle the invoice.

Consider a Vietnamese bakery in Fortitude Valley needing a deck oven and proofing cabinet worth $45,000. Using a chattel mortgage, they claimed $4,091 GST on the next activity statement and spread the loan amount over five years at a fixed rate. The monthly repayment was $850, which matched their weekend turnover from one product line. They also claimed the interest and depreciation each year, which reduced taxable income by around $12,000 in year one.

Hire Purchase Suits Startups Without Trading History

Hire purchase works when you don't have two years of financials or strong trading history. The lender owns the equipment until the final payment, which means they carry less risk and you get approved with less paperwork. It's a solid option for new cafes, food trucks, or hospitality businesses that need a commercial dishwasher or refrigeration unit but can't show profit yet.

Repayments are fixed, the loan term usually runs between three and seven years, and the equipment acts as collateral. Once the contract ends, ownership transfers to you for a nominal fee. The interest rate sits slightly higher than a chattel mortgage because the lender holds title longer, but the approval process moves quickly and doesn't lean as hard on your balance sheet.

Equipment Leasing Keeps Tech Current Without Ownership

Leasing makes sense when you want the latest kitchen technology but don't need to own it outright. You pay a monthly fee to use the equipment, the lessor owns it, and at the end of the lease term you can upgrade, extend, or hand it back. It's useful for point-of-sale systems, coffee machines, or sous vide setups where the technology shifts every few years.

Repayments are tax deductible as an operating expense, which simplifies your accounting compared to depreciating an asset. The downside is you never build equity in the equipment, and over a long period you'll pay more than the purchase price. It works for businesses that value flexibility over ownership, especially when you're testing a new kitchen format or opening a second location with different needs.

Commercial Equipment Finance Covers Full Fitout Costs

Restaurant fitouts don't stop at cooking appliances. You need prep benches, sinks, exhaust canopies, coolrooms, and shelving to meet health code requirements. Commercial equipment finance covers the whole package in one loan, which avoids splitting invoices across multiple suppliers and dealing with separate payment terms.

Lenders assess the total fitout cost, your business plan, and the equipment's resale value. In our experience, a single approval covering $150,000 to $200,000 for a full kitchen setup is more common than patching together smaller facilities. The loan amount gets drawn down as items are delivered, so you're not paying interest on funds sitting idle while the electrician finishes the canopy install.

Fixed Monthly Repayments Protect You From Rate Rises

Fixed repayments mean you know exactly what you're paying each month for the life of the contract. Most equipment finance products lock the rate at approval, whether you choose hire purchase or a chattel mortgage. That gives you certainty when you're building budgets and projecting profit, especially if you're opening a new venue or expanding a ghost kitchen.

Variable rates exist in some commercial equipment finance products, but they're less common because lenders prefer the admin simplicity of a fixed term with no redraw or offset features. The downside is you can't make extra repayments without penalty, but for operational equipment that depreciates steadily, paying it off faster rarely makes financial sense anyway.

Food Processing Equipment Qualifies as Plant and Equipment

If you're running a commercial bakery, butchery, or catering kitchen, food processing equipment like mixers, mincers, slicers, and vacuum packers all qualify as plant and equipment under most finance agreements. That means the same structures that apply to a pizza oven or char grill also work for a dough sheeter or cold smoker.

Consider a butcher in Paddington upgrading to a larger mincer, sausage filler, and boning room refrigeration. The combined cost was $62,000, financed over four years using hire purchase. Monthly repayments came to $1,420, and because the equipment was used solely for taxable supply, the full repayment amount was deductible. The approval took three business days with two years of trading figures and a clear credit file.

Tax Deductible Repayments Reduce Your Annual Bill

Under a chattel mortgage, you claim the interest portion of each repayment as a business expense, plus depreciation on the equipment itself. Under hire purchase or leasing, the full repayment is generally deductible as an operating cost. Either way, financing equipment instead of buying it outright keeps more cash in the business and shifts part of the cost to the tax office.

Depreciation rates for commercial kitchen equipment usually sit between 20% and 40% per year depending on the asset class. A $30,000 coolroom might depreciate at 20%, giving you a $6,000 deduction in year one, while a $15,000 fryer could go at 40% for a $6,000 deduction. Your accountant will apply the right rate, but equipment finance gives you the deduction without spending all your working capital upfront.

Collateral Requirements Are Lower Than Unsecured Loans

Because the equipment itself acts as security, lenders don't usually ask for property or additional guarantees unless the loan amount exceeds $250,000 or your business is newly registered. The application focuses on your ability to service repayments from revenue, the equipment's resale value, and whether you've kept up with existing debts.

That makes equipment finance more accessible than working capital loans or unsecured lines of credit, which lean heavily on your balance sheet and often require personal guarantees from directors. If you're buying a second-hand combi oven, the lender will want a valuation or invoice to confirm it's worth what you're borrowing, but the approval process still moves faster than refinancing your mortgage or raising equity.

Finance Options Exist for Specialised Machinery

Restaurant kitchens aren't one size fits all. A sushi bar needs rice cookers and refrigerated display cases, a wood-fired pizza kitchen needs a Stefano Ferrara oven, and a cocktail bar needs ice machines and glass washers. Lenders who understand hospitality will finance specialised machinery without forcing you into a generic product designed for IT equipment finance or office equipment.

We regularly see approvals for rotisseries, smokers, salamanders, bain-maries, and induction woks that don't appear on a standard lender's approved equipment list. The key is working with someone who can explain what the equipment does, why it holds value, and how it supports your revenue model. A $40,000 Josper grill makes sense to a hospitality-focused lender and no sense to a bank that only finances laptops and desks.

Buying New Equipment Delivers Warranty and Efficiency

New equipment comes with manufacturer warranties, lower running costs, and better energy efficiency compared to used stock. A modern combi oven uses less gas and water than a model from ten years ago, which cuts your utility bills and qualifies for deductions under instant asset write-off rules if the cost sits below the threshold.

Financing new equipment also means you're not inheriting someone else's maintenance history or dealing with parts that are no longer stocked. The resale value holds longer, which makes refinancing or upgrading later more realistic. If you're serious about building a kitchen that lasts, new equipment financed over five years often costs less over the asset's life than buying used gear outright and replacing it every two years.

Whether you're fitting out a new venue in South Brisbane or replacing a failing coolroom in your Newstead cafe, equipment finance spreads the cost across the years you'll actually use the gear. Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions