The ability to purchase commercial catering equipment on lease is a relatively new concept in the catering industry.
This would explain why some upcoming and even established catering businesses would hesitate to try it. There are many different equipment leasing companies out there that are willing to give you a lease-to-own agreement as a one-stop-solution to acquiring catering equipment at a relatively affordable price.
Why You Should Buy Commercial Catering Equipment On Lease
Let’s compare and contrast two methods of financing commercial catering equipment other than leasing.
The first one is a direct cash purchase. It is a simple way of acquiring equipment fast, provided you have sufficient funds to make the purchase. However, it comes with some challenges. For example, if you do not have enough money, you won’t be able to leave the shop with the equipment. Commercial catering equipment can be very expensive in terms of purchasing, repairs and maintenance.
The second option is to take out a bank loan to finance the equipment. This is an excellent alternative for startups that do not have enough cash at hand to make a direct purchase. The problem with this approach is that it may not be feasible for startups that have damaged credit scores, enough money to make a down payment or collateral that is equal to or more than the value of the loan they are asking for. Moreover, many banks don’t like giving loans to startups because there’s always a 95% chance that they will fail during their first year of business.
Leasing becomes the next best option for startups. It’s a fast and relatively simple process. You don’t need collateral, down payment or a perfect credit score. The equipment leasing company will approve your lease if you can show in your financial projections how you plan to make monthly lease payments on time.
Some leasing companies offer flexible leases that give you a grace period of two or three months depending on what your agreement with them is. Your monthly lease payments are counted as down payment for your commercial catering equipment so at the end of the lease period ownership of the equipment will be transferred to you.
What Kind Of Equipment Can You Lease?
The good thing about leasing is that you can finance a wide variety of assets such as furniture, software and office equipment. The sky is the limit as to the type of equipment you can lease for your catering business.
Are You Eligible?
The answer is you probably are. Despite the economic down turn, leasing commercial catering equipment is a flexible type of lending because the money is almost always held in good quality products that have value.
If you prove that you have a solid business plan and you can provide detailed financial information about your business, then you may be eligible for a lease. Even if you are a startup you can still get approved for a lease.
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Word of advice though, don’t send applications to several different leasing companies because this will significantly affect your credit score. Many leasing companies do hard credit checks which have an impact on your credit score.
So rather than send out several applications to different equipment leasing companies, consider looking for one that specifically deals with startups or companies that have damaged credit scores. This way, you will have a higher chance of being approved for a loan rather than trying out your luck by blindly sending out applications to several different companies.
What Are The Rates For Leasing?
Based on your personal circumstances, equipment leasing rates can differ wildly. For instance, if you have a damaged credit score, you are likely to get higher rates than a business owner who has a higher credit score than you.
Generally there are no standard rates but commercial catering equipment lease rates are very competitive when compared to other forms of financing.
Where You Can Get Commercial Catering Equipment On Lease
There are plenty of equipment leasing companies on the World Wide Web that offer leasing to startups. There are also online platforms such as LeaseQ where you can connect with hundreds of financing companies. What’s more is that you can get a free and instant quote.
For more information on leasing commercial catering equipment, simply CLICK HERE.