When you’re opening up a brand-new restaurant, you have two options when it comes to equipment: purchase it outright using cash, credit, or a small business loan; or lease it from an equipment supplier at much less cost. Why is leasing usually the better option for your restaurant? Read on to find out.
1. Fixed payments
Once you settle an agreement with the equipment leasing company, the agreed upon rates are locked in for the entire leasing period. This allows you to predict your monthly spending and minimizes the chance of having incidental expenses that could hurt your monthly cash flow.
2. Keep your cash
If you’re a new restaurant entrepreneur, you likely don’t have loads of cash just sitting in the bank. And even if you do, that cash is probably going towards many other expenses already. Leasing equipment generally turns out to be cheaper than buying equipment. Thus, leasing allows you to keep your cash handy, rather than spend it all on equipment.
3. Expand existing kitchen
For a restaurant that has been around for a while and is well-established, expanding your kitchen seems like the logical next step. However, the risks are high. Leasing new equipment for your kitchen, instead of buying it, allows the owner more flexibility—in case the expansion goes awry, or the new equipment needs to be swapped.
4. Stable credit score
As long as you make timely payments, leasing equipment for your small business should not hurt your credit score.
If you are looking for equipment financing, Biz2Credit can help. Our small business loan experts are available 24/7 by phone (800) 200-5678 or online www.biz2credit.com.