Key takeaways
- Finance long-life kitchen equipment you'll keep for years.
- Lease technology that ages quickly, like POS terminals and kiosks.
- Use a working capital loan when the project mixes equipment with installation, build-out, or other costs.
Side-by-side comparison
| Equipment financing | Equipment lease | Working capital loan | |
|---|---|---|---|
| Ownership | You own it | Lessor owns it; buyout options vary | You own it |
| Collateral | The equipment | The equipment | Usually a general business lien |
| Down payment | 0%–20% | First and last payment, often | None, typically |
| Covers installation / build-out | Partly, often capped | Rarely | Yes |
| Term | 2–7 years | 2–5 years | 6–36 months (longer with SBA) |
| Tax treatment | Depreciation + interest deduction | Depends on lease type | Depreciation + interest deduction |
| Best for | Ovens, walk-ins, hoods, ranges | POS, kiosks, tech, dish machines | Mixed projects, quick decisions |
Which should you choose?
| Purchase | Usually best |
|---|---|
| Walk-in cooler or freezer | Equipment financing |
| Cooking line (range, fryers, ovens) | Equipment financing |
| POS system or kiosks | Lease, or a short-term loan |
| Dish machine | Lease (often includes service) or financing |
| Full kitchen package + installation | Working capital loan or SBA |
| Patio furniture + heaters + permits | Working capital loan |
Watch the total cost
A low monthly lease payment can hide a high total cost. Ask for the total of all payments plus any buyout, and compare it with buying. Use our loan calculator to compare options side by side.
Under current federal law, Section 179 and 100% bonus depreciation can let you deduct qualifying equipment in the year it's placed in service, including financed equipment. Leases are treated differently depending on how they're structured, so confirm with your CPA.
Frequently asked questions
Is it better to lease or buy restaurant equipment?
Buy (finance) equipment you'll use for many years, like refrigeration and cooking equipment. Lease technology that becomes outdated quickly, like POS systems.
Can I use a working capital loan to buy equipment?
Yes. A working capital loan can pay for equipment plus installation and other project costs, which equipment financing may not fully cover.
Sources
We cite primary sources: federal agencies, regulations, and official program rules. Rules vary by state and change over time.
General education, not legal, tax, or financial advice. Loan programs, licensing rules, and lender requirements change and vary by state. Disclosures.