A kitchen equipment quote can compete with payroll, food purchases and the cash needed to open or keep serving customers. Financing spreads the equipment cost over time, but the payment has to fit the restaurant’s operating budget.
When comparing restaurant equipment loans and leasing in Canada, start with four questions: how much cash is due upfront, what will you pay over the full agreement, who owns the equipment, and what happens at the end? Financing arranged by a supplier also needs this review: vendor financing can take the form of a loan or a lease.
In this guide
Restaurant equipment loans, leases and vendor financing
With an equipment loan, the business generally buys the equipment and repays the lender under a loan agreement. The lender may take security over the equipment and require other guarantees. Ask whether the rate is fixed or variable, how payments are calculated and what it costs to repay early. Match the repayment period to how long you expect to use the equipment.
With restaurant equipment leasing, the lessor generally owns the equipment during the agreement. Lease-to-own Equipment Financing provides a documented path to ownership, subject to completing the required payments and purchase conditions. Confirm the final purchase amount in writing; a nominal buyout such as $1 is a feature of a particular contract, not a promise that applies to every lease.
A fair market value (FMV) lease may offer an end-of-term purchase option based on the equipment’s value at that time. Ask about any return option, notice deadline, renewal terms, transport charges and condition requirements. An upgrade or early exit is available only if the agreement provides for it. FMV and lease-to-own describe commercial structures; your accountant should confirm the accounting and tax treatment.
Vendor financing is arranged through an equipment supplier or dealer, often with a separate financing provider. Compare the underlying contract with any other quote. Ask who the lender or lessor is, whether the cash price differs, and which fees apply. Convenience alone does not establish whether it is cheaper or more expensive. Suppliers can learn more about Lease2Grow’s vendor equipment financing programs.
Compare the complete quote before choosing a monthly payment
Use the same equipment price and a comparable term when reviewing offers. A lower payment can reflect a longer agreement, an upfront contribution or a larger final purchase amount. Request a written breakdown of:
- The equipment cash price and the amount being financed, with delivery, installation and taxes itemized.
- The deposit, advance payments and fees due before delivery, including whether advance payments count toward the scheduled total.
- The number, frequency and amount of payments, and whether any rate or payment can change.
- The total scheduled payments, final purchase amount and other charges required to own or return the equipment.
- Security, personal guarantees, insurance requirements and early-payment or cancellation conditions.
Ask for clarification if an offer quotes a payment factor rather than an annual interest rate. A factor is not directly interchangeable with an APR. Compare the actual cash flows and total obligation with help from your accountant or financing adviser.
Illustrative payments for $50,000 and $100,000 purchases
These examples are calculations, not Lease2Grow offers or market-rate estimates. They assume a fixed annual nominal interest rate of 9%, divided into monthly periods, equal payments at each month-end, no final balloon payment and no fees or taxes. Actual quotes can use different conventions and conditions.
- A $50,000 purchase financed in full over 36 months: approximately $1,590 per month, with approximately $57,240 in total repayments.
- A $100,000 purchase with $10,000 paid upfront and $90,000 financed over 60 months: approximately $1,868 per month, with approximately $112,095 in loan repayments. Including the down payment, the total cash paid is approximately $122,095. Totals use unrounded payments; figures are rounded to the nearest dollar.
For a lease comparison, add the required upfront cash, scheduled payments, fees and purchase-option amount. If the final purchase price is not fixed, compare the cost of keeping the equipment under several possible buyout amounts. Include any applicable taxes consistently across the offers.
Plan around the restaurant’s equipment and opening schedule
For an urgent refrigeration replacement, confirm that the supplier has the unit available and can meet the installation requirements. Tell the financing team about the service interruption and any deposit deadline. Credit approval, completed documents and payment to the supplier are separate steps; confirm the release conditions before promising a delivery date.
For a new restaurant or second location, separate the equipment budget from renovations, permits, deposits, opening inventory and payroll. Provide an itemized quote for ovens, refrigeration, dishwashers, preparation equipment and POS hardware. Ask which delivery and installation costs can be included and which costs need another source of funds. Keep a cash-flow forecast for the opening period and slower trading months.
For used equipment, provide its age, condition, seller information and identifying details. Ask about inspection, warranty, installation and lender eligibility before committing to the purchase. The financing term should make sense for the remaining useful life of the unit. A supplier’s willingness to sell an item does not establish a lender’s willingness to finance it.
See the equipment categories and project information on our restaurant and hospitality equipment financing page.
Government-backed loans and tax considerations
The Canada Small Business Financing Program is another route to discuss with a participating bank or credit union. The official program allows up to $1 million in term loans, with a combined $500,000 limit for equipment and leasehold improvements; further sublimits apply. The maximum floating term-loan rate is the lender’s prime rate plus 3%, and a 2% registration fee applies. Fixed-rate rules differ. The financial institution decides whether to approve the request. Check the current CSBFP terms with that institution. This describes a separate program, not a commitment that Lease2Grow arranges CSBFP loans.
Have your accountant review the proposed agreement before relying on a tax deduction. Purchased assets, lease payments and purchase options can have different treatment, and equipment and leasehold improvements may fall into different categories. The CRA’s capital cost allowance classes show why one depreciation rate should not be applied to an entire restaurant project.
Prepare the information needed for a financing review
Requirements vary by lender, business and transaction. Start with the equipment quote and project details, then confirm which supporting documents are needed:
- The business’s legal name, ownership, location, time in operation and a contact for the request.
- An itemized supplier quote identifying new or used equipment, related costs and expected delivery.
- Recent financial information, bank statements and a schedule of existing debt, if requested.
- A business plan, opening budget and cash-flow forecast for a startup or expansion, if requested.
- Insurance, identification and payment-authorisation documents at the appropriate stage, through the lender’s or financing team’s approved secure process.
A credit score alone does not determine the outcome. The lender considers the transaction and its own requirements, which may include business cash flow, owner information, the equipment and available security. A submitted application does not guarantee an offer.
Discuss your restaurant equipment plans with Lease2Grow
Lease2Grow is an independent equipment financing broker with access to multiple lending partners through Affiliated Financial Services. The team can review your equipment quote and business plans, help prepare a financing request and explain the proposed payments and ownership conditions. Available structures depend on the lender’s review.
For broader background, read our equipment financing guide. To discuss a kitchen replacement, new location or equipment package, send the details through our online financing application or book a conversation with the team.
General information for Canadian restaurant operators. Examples are illustrative and exclude taxes and fees. Approval, pricing, security, purchase options, delivery and funding depend on the agreement and lender conditions. Obtain accounting, tax and legal advice for your business.