Program comparison
Buildout Financing vs Equipment Financing
Do I need buildout financing or equipment financing for a new kitchen?
Do I need buildout financing or equipment financing for a new kitchen?
Buildout financing covers work you cannot resell: plumbing, electrical, hoods, walls, permits, and opening inventory, often released on a draw schedule tied to construction milestones. Equipment financing covers the machines, secured by the machines. A new location usually uses both, sized so each pays for what it is built for.
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
| Buildout and Expansion | Equipment Financing | |
|---|---|---|
| Typical amount | 50,000 to 2,000,000 | 5,000 to 500,000 |
| Term | 36 to 84 months | 24 to 84 months |
| Funding speed | 1 to 4 weeks | 1 to 5 business days |
| Documents | Application, contractor bids, lease, financials | Application, equipment quote, bank statements |
| Cost structure | Fixed payment, often with a draw schedule | Fixed monthly payment |
| What it pays for | Construction, permits, leasehold improvements, furniture, and opening inventory. | The specific machines, with a vendor quote behind each one. |
| How money is released | Often in draws tied to construction milestones, so interest starts on each piece as it is used. | In one release to the vendor once the quote clears. |
| What backs the file | Contractor bids, the lease, and financials. Remaining lease term matters, since lenders want the loan paid off before the lease ends. | The asset value and your deposit history. |
| Timeline | 1 to 4 weeks, because bids and lease review take real time. | 1 to 5 business days once the quote is in. |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Choose Buildout and Expansion when
- /You are turning a raw or repurposed space into a working kitchen.
- /Plan review, permits, and contractor draws are on the critical path.
- /Rent is running during construction and you need the payment structure to reflect that.
Choose Equipment Financing when
- /The space is already built and the gap is hardware.
- /You are replacing a failed unit and speed decides the week.
- /You want the machine's own value to carry the underwriting.
When neither is the right answer
Splitting a project across both is normal and usually cheaper than forcing one program to cover everything, because the equipment portion prices against collateral instead of against construction risk.
Other comparisons: Equipment Financing vs Working Capital, SBA Loans vs a Business Line of Credit, Merchant Cash Advance vs a Business Line of Credit.
Common questions
Can equipment be rolled into a buildout loan?
Sometimes, and it simplifies the paperwork. It often prices higher than financing the equipment separately, so ask for both structures in writing before choosing.
What does a draw schedule change?
You stop paying interest on money that is still sitting unused. Each milestone releases the next piece, which matters most on projects that run over schedule.
How much remaining lease term do lenders want?
Enough to outlast the loan. A short remaining term caps the amount and the length of the term you can be offered, so renegotiating the lease can change what is available.
Can I fund a buildout before the lease is signed?
Not usually. The lease is a core underwriting document for buildout files, since it defines how long the improvements can be used.
Want a second opinion on the choice?
A specialist will compare the programs against your real numbers before any credit app or hard pull.
- No credit application and no hard pull to start.
- A specialist reviews your operation before anything is submitted.
- Written offers only, and you can walk away at any point.