Starting a restaurant is an exciting journey, but it often comes with significant upfront costs. Commercial kitchen equipment, restaurant furniture, POS systems, and even your first stock order all require investment before you open the doors. Asset finance for restaurants offers a practical solution, helping new restaurant owners spread the costs, protect cash flow, and get the equipment they need from day one.
This beginner’s guide explores finance options for new restaurant owners, how asset finance works, and step-by-step guidance to make informed funding decisions.
Asset Finance for Restaurants: What You Need to Know
What is Asset Finance and How Can It Help Your Restaurant?
Asset finance allows you to fund essential business equipment without paying the full cost upfront. Instead of buying outright, restaurant owners can lease, hire purchase, or refinance assets, spreading payments over an agreed term.
Unlike traditional business loans, asset finance is secured against the equipment itself rather than requiring additional collateral. This makes it ideal for new restaurants that need equipment finance for restaurants but may not have extensive trading history. Learn more about asset finance options for UK SMEs or explore restaurant and bar finance for sector-specific guidance.
The Core Benefits of Asset Finance for New Restaurants
- Preserve Cash Flow: Keep working capital available for other essentials like staffing, marketing, or rent.
- Access the Latest Equipment: Leasing allows for modern kitchen appliances, equipment and furniture without large heavy upfront costs.
- Flexibility: Finance repayments can be tailored to match your restaurant’s revenue patterns
- Scalability: Expand your restaurant or upgrade equipment as business grows, without excessive borrowing.
Asset finance is a popular choice because it combines restaurant business funding with financial control and minimal risk to other business assets.
Key Types of Asset Finance for Restaurants
Leasing
Leasing allows you to rent equipment over a fixed term. At the end, you may have options to upgrade, extend, or purchase. Leasing works well for items that depreciate quickly, such as kitchen appliances and technology.
Hire Purchase (HP)
Hire purchase spreads the cost across monthly instalments, and once the final payment is made, the equipment becomes yours. HP works well for long-term essentials such as ovens, refrigeration, and coffee machines.
Asset Refinance
Refinancing allows you to unlock capital from existing equipment. If your restaurant already owns valuable equipment, refinancing can free up funds for expansion or working capital. See how equipment refinancing works for UK businesses.
Step-by-Step Guide to Asset Finance for New Restaurant Owners
Step 1: Identify Your Equipment Needs
Before seeking finance, make a detailed list of the assets your restaurant requires:
- Commercial kitchen appliances
- Refrigeration
- Furniture and fixtures
- POS systems and software
- Initial stock, smallwares, and utensils
This ensures you only finance what is necessary, keeping repayments manageable.
Step 2: Understand Your Finance Options
Explore finance options for new restaurant owners:
- Business loans for restaurant owners – Unsecured or secured loans can provide a lump sum but may require personal guarantees. Learn more at business loans.
- Asset finance – Ideal for equipment, spreads the cost, and often requires less collateral. Asset finance can be structured to suit seasonal revenue fluctuations.
- Start-up loans – Government-backed loans can be useful for businesses with limited trading history. See start-up loans.
Step 3: Work With a Specialist Broker
A specialist finance broker like Johnson Reed can help:
- Compare multiple lenders for competitive rates.
- Structure repayments to match your restaurant’s cash flow.
- Simplify the application process and paperwork.
Working with a broker gives you access to restaurant business funding options that suit your plans and budget.
Step 4: Submit Your Application
- For equipment finance for restaurants, lenders typically ask for:
- Business plan with financial projections
- Personal and business credit information
- Details of the equipment to be financed
- Home ownership status
Step 5: Manage Your Finances Effectively
Once finance is approved, focus on:
- Making repayments on time
- Monitoring cash flow
- Planning for future upgrades or expansion
Flexible asset finance allows restaurant owners to start a restaurant with financing without draining reserves.
Tips for Protecting Cash Flow with Asset Finance
- Prioritise essential equipment over optional upgrades.
- Align repayments with seasonal trading patterns
- Combine asset finance with working capital loans
- Use refinancing to release capital for growth or refurbishment
For broader SME finance support, see business equipment finance or explore hospitality finance for additional restaurant-specific solutions.
Frequently Asked Questions About Asset Finance for Restaurants
Can I get asset finance for a brand-new restaurant?
Yes, many lenders and brokers, including Johnson Reed, support new restaurants with limited trading history.
How much can I finance with asset finance?
Funding amounts vary by lender and asset value, ranging from a few thousand pounds for small kitchen equipment to hundreds of thousands for full restaurant fit-outs.
Is leasing better than hire purchase?
Leasing is ideal for rapidly depreciating equipment or temporary use, while hire purchase is better if you want ownership at the end of repayments.
Can I refinance equipment if I already own it?
Yes, equipment refinancing unlocks capital tied up in existing assets, which can be reinvested in your restaurant’s growth.
What documentation is needed?
Typically, lenders require:
- Business plan and projections
- Asset details (supplier invoices or quotes)
- Personal and business credit information
- Copy ID
See our full guide to restaurant and bar finance for more details.
Taking the Next Step
Starting a restaurant is challenging, but the right funding can make the process smoother and financially safer. Asset finance provides a structured, flexible way to secure equipment funding without draining cash reserves.
Use our finance calculator to see repayment options or contact Johnson Reed to speak with an expert and explore the best finance options for new restaurant owners. With the right planning and finance, you can focus on delivering exceptional food and service while keeping your business financially healthy.
