Finance rates for restaurant equipment are usually very tricky to calculate and you may end up with nothing but a very costly transaction.
Without a doubt, leasing is one of the best and preferred ways by restaurant owners to acquire kitchen equipment. This is because they know that leasing has many advantages such as tax benefits, lower monthly payments, flexibility, access to state of the art equipment, etc. Leasing however comes with a lot of risks and one of them is leasing rates.
While it may seem like looking for the best finance rates for restaurant equipment is a very practical and logical approach, it may not necessarily be the best approach. The reason is that the best finance rates do not dictate the best restaurant equipment lease agreement. Finance rates shouldn’t be the only thing that should be used to measure the worth of a lease agreement.
Leasing companies have been known to use low finance rates as a way to lure in prospects but once they sign on the dotted line, they discover that they have entered a bad lease agreement. First, you might be charged interim rent that can make your lease way more costly than it should be. Secondly, the quality of the equipment might be low and the fair market value could be poorly defined.
What Are The Best Finance Rates For Restaurant Equipment?
The best finance rates for restaurant equipment should be the most competitive ones. As mentioned earlier, low rates don’t necessarily mean lower equipment leasing costs. The best rates should include well-defined provisions that are mutually beneficial to you and your lessor.
The best way to find the best finance rates for restaurant equipment is by doing your research, comparing and prioritizing different rates from different reputable equipment leasing companies.
Some companies that lease restaurant equipment might have their own lease rate calculators. These calculators can help you estimate your equipment leasing rate but at the same time, they might just be faulty excel spreadsheets used to generate faulty numbers to lure you to sign up for a bogus deal.
Should You Monitor The Cost Of Leasing Your Restaurant Equipment?
Having talked about finding competitive rates, you also have to consider how much it would cost you to lease the restaurant equipment. There are certain key areas in your lease agreement that you have to monitor to ensure that leasing is not a financial burned, but a way of helping you work with limited cash flow.
One of the things that you should keep in mind when considering leasing is that monthly rates aren’t the only cost. If you are savvy enough, you will know that low monthly payments don’t give a full picture of the exact leasing costs involved. Other costs might be involved such as upfront payments, security deposits and other additional hidden fees.
Other than just finding a company that offers you the best finance rates for restaurant equipment, you should look for a leasing company that understands your immediate and long term goals. A good leasing company will not just hand you a lease agreement for you to sign, they will be willing to discuss with you possible solutions that are best suited to the current needs of your restaurant.
Lease agreements contain many confusing terms and conditions and pinpointing important factors can be a little tricky. First, the cost and finance rates for restaurant equipment should be acceptable. Second, you should look at the conditions relating to options for end-of-lease, returns, replacement, obsolescence, usage, interim rent, etc. Better yet, if you do not want to do all the work, you can hire a trusted financial advisor or lawyer to review your lease agreement and negotiate better terms for you.
Making A Decision
Once you have understood the total cost of your lease and all the end-of lease options and contract details have been finalized, you can be confident that you are entering a lease agreement in which risks have been minimized.
For many restaurant owners, looking for the best finance rates for restaurant equipment and lease management is beyond what internal resources can handle. The bottom line importance of lease agreements is something that many restaurants value and so they turn to leasing specialists to help them review their lease agreements and even help them to find the best leasing rates.
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