There are many advantages to restaurant financing; however for many; it can also be a quite frightening thing. However, in case you set foot in with a proper plan and follow these tips, financing or leasing restaurant equipment might be the finest thing you did for your restaurant business and can even help you get a competitive edge over your industry competition.
Restaurant equipment leasing through a lease program can prove extraordinarily useful to your restaurant business. There are many advantages that this type of financing provides to businesses.
With leasing, through restaurant equipment financing, you usually get longer terms. This financing option is way better than a general bank loan which finances for shorter terms. With long term, your monthly payments are lowered considerably, providing your restaurant business extra working capital each month to keep in reserves or to put back into the restaurant business to boost profitability.
Another important factor to consider in the decision for restaurant businesses to prefer leasing rather than regular bank loans is that there is no cross collateralization. For the reason that majority of banks require businesses to file all sorts of collateral the resources/assets of that business are tied up fully with bank liens. This indicates other resources/assets and the new equipment you’re buying would be tied up with the bank.
Majority of business owners fear that their new equipment will eventually stop working, or will virtually be out of date at the end of the loan. With leasing, there is nothing to worry about with reference to this because at the end of the lease term an upgrade can be offered. Another effective component is that the object won’t decrease in value or lose value as most equipment tends to do.
Other benefits of going with leasing are adaptive payment options and also set monthly payments. You don’t need to worry about the interest rates leaping the monthly rate up every month. This allows you to budget more effectively.
Here are some tips to help you getting through the leasing process;
Consider How You Will Use The Equipment
What type of equipment are you looking to buy? Do you require the equipment for just a short period of time or is it a piece of equipment you will pay for it in a couple of years? Carrying out a quick cost analysis by estimating how much revenue the new equipment will produce can help you figure out if restaurant equipment financing will make you money-making.
Find The Lender Who Understand Your Business
This step is essential in overall success of your restaurant business. Working with a lender who completely understands your state’s policies and laws, the market ebbs and flows, and the way your business runs. This will help you to manage expenses and ensuring lease terms seem right for you.
Determine Your Total Payments And Costs
Open communication will help eliminate any misinterpretation about your lease or loan, which means speaking to your finance partner regarding overall payments, the monthly payment due every month and any additional fees (insurance, taxes and so on.)
Understand The Terms Of Your Lease Agreement
Make sure you check the lease agreement vigilantly and understand the whole lot that was included. In case you don’t understand it all, don’t worry! Your finance partner representative will be able to make clear the whole lot to you. This consists of questions like:
- Will your lender guess the costs for the equipment’s coverage, maintenance and taxes?
- What are the options at the end of the lease agreement?
- What approaches must I follow if I decide to return the equipment?
- Are there any additional costs at the end of the lease agreement?
End Of Story
As soon as all your questions have been answered, you feel contented with the terms and are ready to finance, sign the deal and start enjoying the advantages of your investment!