How to Finance Restaurant Equipment with an SBA Loan
- 1
Create a detailed equipment list
List every piece of equipment needed with vendor quotes. Include installation costs, delivery fees, and any required utility upgrades.
- 2
Determine new vs. used
SBA loans can finance both new and used equipment. Used equipment may have shorter loan terms (typically 7-10 years vs. 10 for new).
- 3
Choose the right SBA program
7(a) is most common for equipment. For equipment over $500K combined with real estate, consider 504.
- 4
Include working capital
Equipment alone isn't enough — include working capital for operations during ramp-up in your total loan request.
- 5
Get detailed equipment financing guidance
The FUNDED Restaurant Guide covers equipment financing strategies including lease vs. buy analysis with real numbers.
Need the full walkthrough with real deal numbers and lender insider tips?
Get FUNDED: The Complete SBA Loan Guide for Restaurant OwnersWhat Restaurant Equipment Can You Finance with SBA Loans?
SBA loans can finance virtually any equipment used in your restaurant business:[1]
Kitchen Equipment
- Commercial ranges and ovens
- Fryers (gas and electric)
- Grills and broilers
- Steam equipment
- Prep tables and stations
- Mixers and food processors
Refrigeration
- Walk-in coolers and freezers
- Reach-in refrigerators
- Prep tables with refrigeration
- Display cases
- Ice machines
Ventilation & Safety
- Hood systems
- Exhaust fans
- Fire suppression systems
- HVAC for kitchen
Front of House
- POS systems and terminals
- Tables and chairs
- Booths and banquettes
- Bar equipment
- Beverage dispensers
Back of House
- Dishwashers
- Storage shelving
- Office equipment
- Security systems
How Do SBA Equipment Financing Options Compare?
| Option | Best For | Down Payment | Term |
|---|---|---|---|
| SBA 7(a) | Most equipment needs | 10-20% | Up to 10 years |
| SBA 504[2] | Major equipment ($500K+) | 10% | 10-20 years |
| Equipment Lease | Preserving cash | 0-10% | 3-7 years |
| Conventional | Established businesses | 20-30% | 5-7 years |
Should You Choose Equipment-Only or Bundled Financing?
Equipment-Only SBA Loans
If you only need equipment (existing location, lease in place), you can get a standalone SBA equipment loan:
- Typically $50,000-$500,000
- 10-year terms
- Equipment serves as collateral[3]
- Faster approval than complex deals
Bundled Financing
For acquisitions or new buildouts, bundle equipment with other costs:
- Acquisition + equipment + working capital
- Buildout + equipment + inventory
- One loan, one payment, streamlined process
- Better rates than multiple small loans
How Much Does Restaurant Equipment Cost?
Budget guidelines for restaurant equipment packages:
| Concept | Equipment Budget |
|---|---|
| Food truck | $50,000-$100,000 |
| Quick service (1,500 sf) | $75,000-$150,000 |
| Fast casual (2,500 sf) | $125,000-$250,000 |
| Full service (4,000 sf) | $200,000-$400,000 |
| Fine dining | $300,000-$600,000+ |
Can You Finance Used Restaurant Equipment with SBA Loans?
SBA loans can finance both new and used equipment:
New Equipment
- Full warranty coverage
- Latest technology and efficiency
- Easier to finance (clear value)
- Higher cost
Used Equipment
- 30-50% lower cost
- May require appraisal
- Shorter useful life (affects loan term)
- Limited or no warranty
Example: Maria's Taqueria Equipment
Maria needs equipment for her new 1,800 sf fast-casual taqueria:
- Commercial range and griddle: $15,000
- Fryers: $8,000
- Refrigeration (walk-in + reach-in): $25,000
- Prep tables and stations: $12,000
- Hood and ventilation: $20,000
- POS system: $8,000
- Furniture and fixtures: $25,000
- Smallwares and supplies: $12,000
- Total: $125,000
Maria bundles this with her buildout costs ($175,000) and working capital ($50,000) for a total SBA 7(a) loan of $350,000, putting down 15% ($52,500).[4]