Everything You Need to Know About Restaurant Equipment Finance

Why Software Developers Finance Restaurant Equipment

Commercial equipment finance lets you acquire restaurant equipment by spreading the cost over time instead of paying upfront. For software developers moving into hospitality as a career shift or side project, this means you can keep your cash working elsewhere while still accessing the ovens, refrigeration units, and prep stations you need.

Consider a developer who's launching a cloud kitchen concept while still working full-time. They need a commercial oven, refrigeration, and prep equipment totalling around $80,000. Paying that upfront would drain their offset account and emergency fund. Financing the equipment over five years means they keep that capital available for ingredients, wages, and the inevitable adjustments that come with any new venture. The monthly repayment sits around $1,500, which they can manage from initial revenue without destabilising their household budget.

The equipment itself acts as collateral, which means the approval process focuses on the viability of your business plan and your serviceability rather than requiring residential property as security. Most commercial equipment finance structures are similar to the car finance you might already be familiar with, just applied to ovens and dishwashers instead of vehicles.

Chattel Mortgage vs Hire Purchase

A chattel mortgage lets you own the equipment from day one while using it as security for the loan. You claim the full GST input tax credit upfront, depreciate the asset, and deduct the interest portion of your repayments. At the end of the term, you own the equipment outright.

Hire purchase means the lender owns the equipment until you make the final payment. You can't claim the GST upfront, but you still depreciate the asset and deduct interest. Ownership transfers once the term ends. The functional difference comes down to GST timing and whether you want immediate ownership on paper.

In our experience, developers with established businesses lean toward chattel mortgages because the upfront GST credit improves cashflow in the early months. If you're setting up a new entity without significant turnover yet, hire purchase keeps the structure simpler and defers the GST benefit until you're trading consistently.

What You Can Finance

Commercial kitchen equipment covers everything from sous vide machines and blast chillers to walk-in fridges and ventilation hoods. IT equipment finance principles apply here too: if it's essential to your operation and has a useful life beyond a year, it's financeable.

You can also bundle installation costs, freight, and even some fit-out expenses into the loan amount if they're directly tied to getting the equipment operational. Lenders typically finance up to 100% of the equipment and associated setup costs, though some cap it at 80% depending on the asset type and your business structure.

Financing work vehicles like delivery vans or refrigerated trucks falls under the same structure. If you're running a meal prep service or catering operation, the vehicle is just another piece of plant and equipment.

How Lenders Assess Software Developers

Lenders assess your capacity to service the repayments based on projected business income and your existing personal income. If you're still employed as a developer, that consistent salary strengthens your application significantly. The business doesn't need to be profitable yet, but you do need a credible plan showing how revenue will cover the repayment once you're operational.

A developer we worked with recently was setting up a weekend burger concept while contracting four days a week. Their contract income was $180,000 annually, and they needed $60,000 for a commercial char grill, fryer, and refrigeration. The lender approved the application based on their contract income alone, treating the business income as upside rather than a requirement. The equipment repayment was $1,100 per month, well within their capacity even if the business took longer to break even than planned.

If you've moved fully into the hospitality business and no longer earn a tech salary, lenders will want to see your business trading history, ABN registration, and financial statements. This is where self-employed loans for tech industry workers experience becomes relevant: the same principles around demonstrating income apply whether you're consulting or running a restaurant.

Tax Deductibility and Depreciation

The interest portion of your repayments is tax deductible when the equipment is used to produce assessable income. Depreciation is also deductible, which means you're writing off the equipment's value over its effective life while claiming the interest each year.

For restaurant equipment, the Australian Taxation Office sets depreciation rates based on asset type. A commercial oven might depreciate over ten years, while smaller items like food processors could be written off faster. Instant asset write-off rules sometimes apply for lower-value items, letting you claim the full cost in the year of purchase if your business meets the turnover threshold.

Your accountant will structure this based on your business income and tax position, but the finance arrangement itself is designed to be tax effective without requiring complicated structuring. You're deducting the cost of running your business, which is exactly what the tax system expects.

Fixed Monthly Repayments and Cashflow

Most commercial equipment finance uses fixed monthly repayments over a set term, usually between two and seven years. You know exactly what you're paying each month, which makes budgeting straightforward.

The term you choose affects your repayment size and total interest cost. A shorter term means higher monthly repayments but lower total interest paid. A longer term reduces the monthly commitment but increases the overall cost. For capital-intensive equipment like commercial refrigeration or multi-deck ovens, a five-year term is common because it balances affordability with the equipment's useful life.

If your business generates uneven cashflow in the early months, fixed repayments give you certainty. You're not managing a variable rate that fluctuates with the Reserve Bank's decisions, and you're not risking a repayment spike during a slow trading period.

How to Structure the Application

You'll need quotes for the equipment, your ABN and business registration, and recent financials if the business is already trading. If you're still in the setup phase, a business plan showing your revenue model, target market, and how the equipment fits into your operation is essential.

Lenders want to see that you've thought through the cash requirements beyond just the equipment. If you're financing $100,000 in kitchen equipment but haven't accounted for fit-out, licensing, or working capital, that raises questions about whether the business is properly capitalised.

The approval process typically takes a few days to a week, depending on the lender and the complexity of your business structure. Once approved, the lender pays the supplier directly, and you take possession of the equipment. Your repayments start within a month of settlement, so make sure your cashflow can absorb that timing.

We regularly see developers approach equipment finance the same way they'd approach a technical problem: they want to understand the components, the logic, and the edge cases before committing. That works well in this context because the structure is modular and transparent. You're not dealing with offset accounts or redraw facilities; you're managing a fixed repayment on a defined term for a specific asset.

Call one of our team or book an appointment at a time that works for you. We'll walk through your business plan, compare finance options from banks and lenders across Australia, and structure the application to match your cashflow and tax position.

Frequently Asked Questions