If you’re exploring restaurant equipment financing for the first time, you probably have questions. What happens after you apply? What do lenders look at? What if your credit isn’t perfect? Can a startup restaurant qualify? And how does the financing process actually work?
At FS Foodservice Solutions, we specialize in financing commercial restaurant and foodservice equipment. Our job is to make the process as straightforward as possible and help you understand your options before you sign anything.
Here’s what to expect from application through funding.
1. Apply for Restaurant Equipment Financing
The first step is a simple financing application that gives us the basic information we need to begin exploring options for your equipment purchase.
Applying is free, there’s no obligation to move forward, and our initial review uses a soft credit inquiry, which does not impact your credit score.
We can finance nearly any type of commercial foodservice equipment and work with most equipment dealers. Financing options are available for established businesses, startups, and a wide range of credit profiles.
2. We Review More Than Your Credit Score
One of the biggest misconceptions about restaurant equipment financing is that approval comes down to a single credit score.
Credit matters, but lenders look at the bigger picture.
Depending on the transaction, they may consider:
- Personal and business credit history
- Time in business
- Business revenue and cash flow
- The amount you’re requesting
- The equipment being purchased
- Existing business debt and payment obligations
- The overall strength of the business and ownership profile
We have financing programs that can accommodate a wide range of credit profiles, including scores 550 and up. A particular credit score, however, does not guarantee approval. Late payment history, limited credit history, or too few active reade lines can also affect an approval. Most lenders require a minimum of 3 established trade lines to be considered.
As the amount requested increases, or when there are challenges within the credit profile, lenders may request additional documentation. This could include bank statements, tax returns, financial statements, proof of income, or other information that helps them better understand the business.
Learn why applications get declined, and how to improve your outcome, here.
Can a Co-Signer Help With Equipment Financing?
Sometimes.
Adding a financially strong co-signer or additional guarantor can help strengthen certain applications. However, it isn’t necessary or beneficial in every situation.
If we believe adding someone could help improve your financing options, we’ll talk with you about it.
It’s important that anyone agreeing to co-sign understands that they will be financially responsible for the payments as well. Learn more about adding a co-signer here.
3. We Explore Financing Options With Our Lender Network
FS Foodservice Solutions is an equipment finance broker. So, what does that mean for you?
We aren’t limited to one lender or one set of credit guidelines.
Instead, we work with a network of lenders offering different programs, credit requirements, and areas of expertise. We review your application and determine which financing option may be a good fit for your specific transaction.
That flexibility can be especially valuable in the restaurant industry. A startup opening its first location, an established restaurant replacing a walk-in cooler, and a multi-unit operator completing a major renovation may need very different financing programs.
The same is true for credit. Rather than expecting every applicant to fit into the same box, we can explore options based on the overall transaction.
4. Review Your Restaurant Equipment Financing Offer
If approved, we’ll walk you through the financing options available to you, including the payment, term, structure, and any important requirements.
Depending on the program, sales tax may be included in the amount financed upfront or paid “on the stream.”
When sales tax is paid on the stream, the applicable tax is collected along with your scheduled payments rather than included in the original equipment funding amount.
When your approval details are sent over, you’ll see if the amounts include tax or not, so you know how the tax is being handled prior to signing your documents.
5. Decide Whether Financing Makes Sense for You
An approval does not obligate you to accept financing.
You’ll have an opportunity to review your financing documents before signing, and we encourage you to ask questions about anything you don’t understand.
Once documents are signed and any remaining funding requirements are completed, we coordinate with your equipment dealer and lender to move the transaction toward funding.
Agreements are non-cancellable, so it’s important that you ask any questions prior to signing to ensure you understand and are comfortable with the terms.
Restaurant Equipment Financing FAQs
What types of restaurant equipment can I finance?
We can finance nearly any type of commercial restaurant and foodservice equipment.
That can include ovens, ranges, fryers, refrigeration, walk-in coolers and freezers, ice machines, dishwashers, food prep equipment, bakery equipment, commercial coffee equipment, furniture, and complete equipment packages. Soft costs such as freight, installation, smallwares, signage, and other items may also be eligable for financing, subject to lender guidelines.
If you’re unsure whether a particular piece of equipment can be financed, ask us.
What credit score do I need for restaurant equipment financing?
There isn’t one minimum credit score that determines whether you’ll qualify.
FS Foodservice Solutions works with a network of lenders and has programs that can accommodate a wide range of credit profiles, starting around 550.
Credit is only one part of an application. Depending on the financing program, lenders may also consider time in business, revenue, payment history, existing obligations, the equipment being purchased, and the overall strength of the applicant.
Can I get restaurant equipment financing with poor credit?
Credit challenges do not automatically mean restaurant equipment financing isn’t an option.
Because different lenders have different credit requirements, we may be able to explore programs designed for applicants who don’t meet traditional bank credit standards.
Applications with credit challenges may require additional documentation, a down payment, a co-signer or additional guarantor, or a different financing structure depending on the circumstances.
Can startup restaurants qualify for equipment financing?
Yes. We have restaurant equipment financing options available for startups and newer businesses.
Because a startup doesn’t have an established business history to review, lenders may place greater emphasis on the owners and the overall transaction. Additional information or documentation, such as personal bank statements and tax returns, may be needed.
Will applying for equipment financing affect my credit?
Our initial application uses a soft credit inquiry, which does not impact your credit score.
Most of our lending partners run a soft credit check as well. If a hard inquiry is required as part of a specific financing program, we’ll let you know.
Will I need to provide bank statements or financial documents?
Not always.
Restaurant equipment financing requirements vary based on the amount requested, credit profile, time in business, and lender.
Straightforward transactions may require very little documentation. For larger financing requests or applications that need additional support, a lender may request bank statements, tax returns, financial statements, proof of income, or other documentation.
Once we receive your application, we will let you know what additional items we need and will keep you posted as your application progresses to help you clear any stipulations the lender requires.
Would adding a co-signer help me qualify?
Sometimes! A financially strong co-signer or additional guarantor may strengthen an application, but it isn’t necessary or beneficial in every situation. Learn more about adding a co-signer here.
How do I know if you work with my restaurant equipment dealer?
FS Foodservice Solutions works with restaurant equipment dealers throughout the country and can generally finance equipment purchased from the dealer you’ve chosen.
If we haven’t worked with your dealer before, that doesn’t necessarily mean we can’t finance your purchase. We will just need to collect some basic information from them to get them set up in the system.
How is sales tax handled when financing restaurant equipment?
It depends on the financing program.
Sales tax may be included in the amount funded at the beginning of the transaction, or it may be paid “on the stream.” When tax is paid on the stream, the applicable tax is collected along with your scheduled payments.
Can I pay off my restaurant equipment financing agreement early?
Generally, yes. Most of the programs we offer do not have a prepayment penalty, and you can request a payoff quote at any time.
However, many equipment finance agreements are structured differently from traditional bank loans. Payments may not be separated into principal and interest, which means paying off an equipment finance agreement early may not result in the same savings you might expect from a traditional loan.
Many lenders offer a small early payoff discount. The amount varies depending on the lender, your specific agreement, the remaining balance, and how far you are into your term.
Your financing agreement controls your specific payoff terms, and you can request current payoff information from your lender at any time.
Am I obligated to move forward if I’m approved?
No.
Applying and receiving an approval does not obligate you to accept financing. We’ll review the available option with you so you can decide whether it makes sense for your business.
How long does restaurant equipment financing take?
Timing depends on the size and complexity of the transaction, the lender’s requirements, and how quickly any requested documentation is provided.
Small, straightforward transactions can often move quickly, sometimes with decisions coming back in less than an hour, while larger or more complex equipment purchases may require additional underwriting and documentation.
Who do I contact if I have questions?
Before your financing agreement begins, the FS Foodservice Solutions team is here to answer questions, explain your options, and help guide you through the restaurant equipment financing process.
Once your agreement begins, your lender becomes your primary contact for account-specific questions, including payments, account balances, payoff quotes, billing changes, and other servicing needs. Because FS Foodservice Solutions does not service your agreement, we do not have access to your account or payment information after funding.
That doesn’t mean you can’t call us! If you’re ever unsure who to contact or need help getting pointed in the right direction, we’re always happy to help.
Restaurant Equipment Financing Shouldn’t Feel Complicated
Whether you’re opening your first restaurant, replacing one piece of commercial kitchen equipment, renovating an existing location, or outfitting an entire operation, financing can give you another way to get the equipment your business needs without paying the entire cost upfront.
Our role at FS Foodservice Solutions is to help you understand your options, navigate the process, and know what you’re agreeing to before you sign.
Have questions? Ask us. We’d much rather explain something upfront than have you sign an agreement you don’t fully understand.