Leasing Catering Equipment For Your Business

Building a successful catering business requires hard work and dedication. Whether you're starting fresh or managing an established brand, careful financial planning is crucial for making sound business decisions. One way to manage costs effectively is by leasing equipment instead of buying it outright. This article explores the benefits of leasing and how it can contribute to your catering business's success.

Leasing offers a way to spread the cost of essential equipment while providing flexibility that may better suit your business needs. Lease-to-buy agreements are increasingly popular among catering businesses of all sizes. Essentially, you pay for the equipment over an agreed period, typically two to five years, and then make a final payment to own it outright at a pre-agreed price.

Both new and established catering businesses can lease equipment valued at over £1000 (excluding VAT), from ovens and fridges to dishwashers and glass washers. Commonly leased items include:

• Commercial cooking ranges and cookers
• Commercial fryers and commercial griddles
• Charbroilers, rotisseries, and salamander grills
• Kitchen ventilation systems, hoods and extraction canopies
• Walk-in coolers and freezers
• Refrigerators and freezers
• Ice machines
• Commercial dishwashers and glass washers

Commercial leasing offers several advantages:

• Spreading the cost: Makes budgeting and cash flow management easier.
• Upgrading equipment: Allows access to more advanced models that might be unaffordable to buy outright.
• Potential tax benefits: Consult your accountant to explore potential tax advantages.

If leasing isn't the right fit, other options exist:

• Buy now, pay later: Services like iwocaPay allow spreading payments over three months with 0% interest or over 12 months.
• 0% interest credit: Selected brands may offer interest-free credit.

Several programs can further reduce costs:

• Carbon Trust Loans: Small and medium-sized enterprises (SMEs) may qualify for interest-free loans for energy-efficient equipment, including restaurant cooking appliances. Check the Carbon Trust website for details.
• AIA Scheme: While the ECA scheme concluded in 2020, it has been replaced by the AIA scheme, which may offer tax relief for energy-efficient equipment, such as combi ovens and recently added commercial dishwashers, that features on the Energy Technology List (ETL). It’s a good idea to consult with a financial advisor for the most up-to-date information. 

Leasing can be a valuable tool for managing equipment costs and potentially gaining tax advantages. It can be a smart way to invest in your catering business, even in an uncertain economy. Contact our team to discuss leasing options or read The Truth About Commercial Leasing article to learn if leasing could be a viable option for your business..

Equipping a commercial kitchen is a significant investment. Whether your budget is large or small, carefully considering all options is essential. Commercial equipment is expensive, so making the right choices from the start is crucial.

Available Options

• Buy new: The most desirable but also the most expensive option. Buying new offers the cover of commercial warranties and peace of mind. Explore options for tax rebates or incentives on energy-efficient models.
• Buy used: Cheaper but comes with risks like expired warranties and wear and tear. Running costs may also be higher. Consider used equipment, especially for durable items like gas ranges, fryers, ovens, and steam tables. Be cautious with refrigeration due to potential repair costs.
• Buy damaged or graded: Graded catering equipment is new equipment with minor cosmetic damage sold at a discount. Look for new equipment without the original packaging or units with cosmetic damage sold at a discount.
• Buy overstocked items: Older models or stock from closing businesses sold at reduced prices. Availability is limited.
• Leasing: Leasing can be a viable option when budgets are tight. It spreads the cost but may have limited equipment choices due to minimum spend and a higher overall cost due to interest. Research reputable companies and carefully review all terms before committing.
• Reduce other costs: Explore cheaper alternatives for crockery, glassware, cutlery, linens, and furniture to free up funds for equipment.

Looking to purchase commercial catering equipment whilst working on a tight budget may feel like an impossible task. By making shrewd business decisions and choosing the best options for your financial expenditure, fully equipping your commercial kitchen on even the smallest of budgets is entirely possible.