Restaurant equipment financing lets operators fund $5,000–$500,000 of commercial kitchen equipment with monthly payments instead of cash up front. Typical rates run 5.99%–24% APR over 24–84 months, with funding decisions in 24–48 hours and the equipment itself serving as collateral. The category covers walk-ins, hoods, ovens, fryers, dishwashers, ice machines, espresso machines, and POS systems — most of it eligible for Section 179 (up to $1.16M deduction in 2026).
Loan secured by the equipment itself. You own day 1, deduct Section 179 in year 1, pay monthly over 24–84 months.
Equipment lease
Rental over a term with end-of-term options ($1 buyout, FMV, 10% PUT). Monthly payments often lower; ownership flexibility higher.
Section 179
IRS rule letting restaurants write off up to $1.16M of equipment cost in year 1 instead of depreciating over 5–7 years.
EFA (Equipment Finance Agreement)
Hybrid: behaves like a lease but you own at end with no buyout. Most common restaurant-vertical product.
TI (tenant improvement)
Build-out costs separate from equipment: hood install, gas lines, drains, electrical, walk-in pad. Usually 30–50% of total restaurant build-out.
5.99%–24%Typical APR Range
$5K–$500KLoan Range
24–84 moCommon Term
24–48 hrsFunding Speed
580–650Min Credit Score
$1.16M capSection 179 (2026)
What restaurant equipment financing actually covers
Lenders finance any commercial kitchen asset that holds resale value: walk-in coolers, walk-in freezers, reach-ins, hoods + exhaust, gas ranges, charbroilers, fryers, combi ovens, deck ovens, dishwashers, ice machines, espresso machines, mixers, slicers, prep tables, POS systems, and full restaurant build-out packages. Soft costs like installation labor and permitting are usually rolled in if the loan is $25K+.
Five routes operators actually use
1. Equipment financing (loan secured by the asset, 5.99–24% APR, 24–84mo). 2. Equipment lease (FMV or $1 buyout, monthly payments lower, end-of-term options). 3. SBA 7(a) or microloan (lowest rates 6–11%, 4–8 week close, paperwork-heavy). 4. EFA — Equipment Finance Agreement (hybrid, restaurant-vertical specialty). 5. Vendor financing through equipment dealers (Hoodmart, Ascentium, Beacon — convenient but rate-locked). Most operators end up combining 2–3 of these for a full build-out.
Section 179 in 2026 — what changed
Section 179 deduction cap is $1,160,000 for tax year 2026, with phase-out starting at $2.89M of equipment placed in service. Bonus depreciation drops to 60% (down from 80% in 2025, 100% in 2022). For a single-location restaurant spending $80K on financed equipment, that's roughly $19,200 in first-year tax savings at the 24% bracket — confirm with your CPA before filing.
What lenders actually look at
Most equipment-financing applications need: 580+ personal credit (some go to 550 with a higher rate), 1+ year in business OR a 20–25% down payment for startups, 3–6 months of business bank statements, an equipment quote or invoice, and a basic business plan if the loan is over $100K. Time-in-business is the #1 decline reason — first-year operators get rejected on volume more than on credit.
Financing Type
APR Range
Loan Amount
Term
Min Credit
Best For
Equipment Loan
5.99%–24%
$5K–$500K
24–84 mo
580+
You want to own the equipment day 1
Equipment Lease (FMV)
8%–22%
$5K–$500K
24–60 mo
600+
Lower monthly payment, end-of-term flexibility
EFA (Equipment Finance Agreement)
7%–20%
$5K–$250K
24–60 mo
620+
Restaurant-vertical specialty, simpler doc set
SBA 7(a) / Microloan
6%–11%
$5K–$500K
Up to 10 yr
640+
Lowest rate, willing to wait 4–8 weeks
Vendor Financing
8%–18%
Varies
24–60 mo
580+
Buying from one vendor, want one-stop
Equipment Financing Calculator
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Frequently Asked Questions
How much does restaurant equipment financing cost?
Monthly payments depend on loan size, rate, and term. A $50,000 loan at 8.5% APR over 60 months runs about $1,025/mo. A $12,000 walk-in cooler at the same rate over 60 months is roughly $246/mo. Use the calculator above to model your specific equipment.
Can I get restaurant equipment financing with bad credit?
Yes — several restaurant-vertical lenders fund operators with 550–600 credit scores. Expect higher APR (15%–28%), a larger down payment (20%–30%), and shorter term (24–48 months). Bad credit doesn't disqualify you; it changes the price.
Is restaurant equipment financing tax-deductible?
Yes. The equipment qualifies for Section 179 (up to $1.16M deduction in 2026) plus 60% bonus depreciation on amounts above the cap. Loan interest is also deductible as a business expense. Equipment leases get treated differently — payments are deducted ratably as operating expense.
How fast can I actually get funded?
Equipment financing through online lenders is typically 24–48 hours from application to funding decision. SBA 7(a) loans take 4–8 weeks. EFA (Equipment Finance Agreement) products are usually 3–5 business days. Funding speed is one of the biggest practical differences between routes.
What about used restaurant equipment — can that be financed?
Yes. Most equipment lenders finance used commercial equipment up to 7–10 years old, often at slightly higher rates (1–3% premium) and shorter terms. Walk-ins, hoods, and dishwashers tend to qualify for the longest financing on used; smallwares and plated POS systems often don't.
Do I need to be 1+ year in business?
Not always. Several lenders specifically work with startup restaurants — they look at projected revenue, owner experience, business plan, and personal credit instead of time in business. Expect a 20–25% down payment and a higher rate (12%–22% APR vs 8%–14% for established operators).
Real Restaurant Operator Stories
“I financed a $14K walk-in cooler at 9.2% APR over 60 months. Application was 8 minutes; funding hit my account 36 hours later. The Section 179 deduction saved me $3,360 at tax time.”
Maria T. — Houston, TX · First-location bistro · 640 credit score
“Used SBA 7(a) for the full $185K build-out. Took 6 weeks but the 6.75% rate over 10 years made the math obvious vs the 12% EFA quote we had.”
James K. — Portland, OR · Bakery, second location · 710 credit score
“Two lenders said no. Third (a vendor-financing route through our hood installer) approved $42K at 18% APR. Refinanced down to 11% after 14 months of on-time payments.”
Priya S. — Atlanta, GA · Indian restaurant, opened with 560 credit
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VI
Reviewed by Vlad Ivanov AI+SEO operator at wordsatscale.com. 9 GSC-verified sites; founder of the SearchGAP Method community. Bio + portfolio at wordsatscale.com.
