Program comparison
Equipment Financing vs Working Capital
Should a restaurant use equipment financing or working capital?
Should a restaurant use equipment financing or working capital?
Use equipment financing when the money buys a specific machine, because the machine secures the loan and stretches the cost over 2 to 7 years. Use working capital when the money covers payroll, inventory, or repairs, since there is no asset to pledge and the shorter term matches a short gap.
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.
| Equipment Financing | Working Capital | |
|---|---|---|
| Typical amount | 5,000 to 500,000 | 10,000 to 500,000 |
| Term | 24 to 84 months | 3 to 18 months |
| Funding speed | 1 to 5 business days | 1 to 3 business days |
| Documents | Application, equipment quote, bank statements | Application, 3 to 6 months of bank statements |
| Cost structure | Fixed monthly payment | Fixed daily, weekly, or monthly payment |
| What secures it | The equipment itself, which is why approval leans on the asset and the vendor quote. | Nothing specific. Approval leans on recent deposits, so revenue history carries the file. |
| What the money can buy | The quoted equipment, plus soft costs such as delivery and installation on most programs. | Anything the business needs, including labor, food cost, rent, and emergency repairs. |
| How the payment feels | One fixed monthly payment sized to the useful life of the machine. | Daily, weekly, or monthly payments over a much shorter window, so the payment is larger. |
| Total cost pressure | Lower, because collateral reduces lender risk. | Higher, because speed and no collateral are priced 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 Equipment Financing when
- /The spend is a machine with a quote attached: hood, walk-in, combi oven, POS, or a delivery vehicle.
- /You want the payment spread across the years the equipment will run.
- /The business is young and the asset can do the underwriting work your balance sheet cannot yet.
Choose Working Capital when
- /Money goes out before it comes in: payroll before a catering invoice pays, inventory before a busy weekend.
- /The need is not an asset, so there is nothing for an equipment lender to file against.
- /You need funds in 1 to 3 business days and can carry a short, heavier payment.
When neither is the right answer
If the real problem is a full kitchen build rather than one machine, buildout and expansion financing fits better than either, because draws can be tied to construction milestones instead of funding the entire project up front.
Other comparisons: SBA Loans vs a Business Line of Credit, Merchant Cash Advance vs a Business Line of Credit, Buildout Financing vs Equipment Financing.
Common questions
Can I use working capital to buy equipment?
Yes, and operators do it when a unit fails on a Friday and the vendor wants payment before an equipment lender can process a quote. It costs more over the life of the money, so it is a speed decision, not a cost decision.
Can I run both at the same time?
Often yes. Lenders look at total debt service against your deposits, so stacking is a question of what your monthly cash flow supports, not a hard rule.
Which one is faster?
Working capital, typically 1 to 3 business days against 1 to 5 for equipment, mostly because equipment files wait on a vendor quote.
Does either require a hard credit pull to see options?
No. A hard pull happens only after you choose a specific lender to move forward with.
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.