Should You Lease or Buy Commercial Kitchen Equipment?

Technical Drawings

Should you lease or buy kitchen equipment? It’s a big decision! Let's weigh your options and find the best fit for your needs. 

Kitchen equipment accounts for a significant portion of restaurant costs, so your means of funding these expenses must fit within your budget and finance strategy. Consider your current financial situation, operational needs, and long-term outlook before deciding which route is right for your restaurant. And, of course, you need to consider the pros and cons of each. 

Leasing Kitchen Equipment 

Pros

• Lower initial costs—Leasing requires less upfront capital, helping preserve cash flow for other costs. 
• Maintenance included—Many leases cover maintenance and repairs, so you won’t have to pay for fixes. 
• Easy upgrades—Leasing lets you upgrade your equipment regularly, giving access to the latest technology without big investments. 
• Easier financing—Leasing generally offers fast approval processes compared to traditional bank loans. 

Cons

• Higher long-term costs—Total payments often exceed the purchase price of kitchen equipment over the lease period. 
• No ownership—Leased equipment doesn't build equity, and you must renew the lease or return the equipment at the end. 
• Contractual obligations—Breaking a lease early can lead to penalties and fees, with less flexibility to restructure or change your restaurant. 
• Limited customization—Your lease might limit modifications or equipment adjustments. 

Leasing is a great option if you have limited capital. It’s also viable if you prefer predictable monthly payments and want to avoid additional maintenance costs for your restaurant. 

Buying Kitchen Equipment 

Pros

• Ownership & equity—When you buy kitchen equipment, you own it and gain a valuable business asset. 
• Customization & control—Owning your kitchen equipment lets you customize it to fit your needs—no restrictions. 
• Long-term savings—Buying kitchen equipment costs more upfront, but is cheaper than leasing.
• Tax benefits & depreciation—You can deduct kitchen equipment and depreciation during tax season.

Cons

• High upfront investments—Buying kitchen equipment outright is expensive and can strain a restaurant's cash flow.
• Maintenance costs—If repairs become necessary, you are responsible for them and must cover the costs. 
• Depreciation risks—Over time, kitchen equipment loses its value, meaning you’re likely spending more than you’d get back from selling it later. Low resale value makes it tough to recoup costs! 

Thinking about buying your equipment? Here's the scoop: If you’ve got the budget or access to financing, owning your gear might be the way to go! 

Planning to use it long-term or want full control and customization? Buying ensures it’s yours to manage and modify as you need.