Best Practices
How to Get the Equipment Your Restaurant Needs Without Killing Your Cash Flow
New oven. Walk-in cooler. Commercial dishwasher. The equipment that keeps your kitchen running doesn’t come cheap — and paying for it all upfront can drain the cash you need to actually run your business.
Good news, we’ve asked our partner, Accion Opportunity Fund (AOF) and they’ve shared you don’t have to choose between the right equipment and healthy cash flow. You just need to know your options.
Lease It, Don’t Own It (At First)
For most restaurant equipment, leasing is worth a serious look Instead of a large upfront purchase, you make smaller monthly payments — and at the end of the term, you can upgrade, buy, or walk away.
Leasing works especially well for equipment that gets outdated quickly (POS systems, refrigeration) or anything you’re not sure you’ll need long-term. It keeps cash in your pocket.
Loans make more sense for core equipment you plan to keep for many years. Just know that lenders will value your restaurant equipment at only 30–40% of what you paid for it once it’s installed — because it’s customized and hard to resell. That affects how much they’ll lend and on what terms.
Cut Your Upfront Costs with Tenant Improvements
If you’re building out a new space, negotiate hard for a tenant improvement (TI) allowance from your landlord. This lets the cost of your build-out get folded into your lease rather than paid upfront.
"Cash flow is the lifeblood of your restaurant. Protect it — even when you’re investing in growth."
- Accion Opportunity Fund (AOF)
Less cash out the door at opening means more runway to reach profitability.
What Lenders Actually Want to See
Whether you’re applying for a loan or a lease, lenders evaluate the same basic things: your track record, your cash flow, and your preparation. The number they care most about is your Debt Service Coverage Ratio (DSCR) — a simple measure of whether your income covers your debt payments, with a little room to spare.
You can calculate it yourself: divide your net operating income by your total debt payments. Most lenders want to see a ratio of at least 1.25, meaning you’re bringing in 25% more than you owe.
Clean books and current financials signal that you’re a safe bet.
The Bottom Line
Getting the equipment you need doesn’t mean emptying your bank account. Lease where it makes sense, negotiate your build-out costs into your lease, and show up to any lender with your numbers in order.
Cash flow is the lifeblood of your restaurant. Protect it — even when you’re investing in growth.
Want to Learn More? Explore Equipment Financing loan from AOF
Related Resources
Equipment Financing Strategies: Stop guessing about equipment financing. Join industry expert Chip Leas to learn how to confidently fund the equipment your restaurant needs, compare leasing vs. financing options, and access the capital that helps your business grow.
Short-Term Finance Options for Independent Operators: Cash flow is critical to success in any business, but it can be a significant challenge in seasonal businesses such as restaurants. When sales are strong, an operator might be able to cover an emergency need, knowing money they spend is flowing back into the business with every table turned. When business isn't booming, that same emergency can't be handled quite so easily. When is a short-term loan a good idea?
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