Catering equipment finance: how restaurants, cafés and pubs pay for kitchen kit

Catering equipment finance lets UK limited companies spread the cost of ovens, fridges, coffee machines or a full fit-out over monthly payments. If choosing a hire purchase, it means you own the asset at the end of the term, while in a lease agreement, you don't.

At iwoca, we don't specifically offer equipment financing, but our Flexi-Loan solution, backed by a director's personal guarantee, can cover your company's deposits, used kit and fit-out costs.

How you finance assets changes the tax implications. When using hire purchase agreements you can usually claim capital allowances, including the annual investment allowance of up to £1 million a year. But you can't claim them on equipment you lease (gov.uk) in the government's current rules (as of 12 October 2026).

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What are the main ways to finance catering equipment?

There are three main structures: hire purchase, a finance lease and an operating lease. A fourth route is an unsecured business loan, where you buy the kit outright and repay the lender instead.

These options differ depending on who owns the equipment, what you pay upfront and how it's taxed. With hire purchase, you pay a deposit and fixed instalments, and the kit becomes yours after the last payment. With a finance lease, you rent it for most of its working life, and the lessor keeps ownership. An operating lease is a shorter rental, and the kit goes back at the end.

Tax details above are sourced from gov.uk's annual investment allowance and what you can claim on, accurate as of 12 October 2026. Tax treatment depends on your company, so check this with your accountant.

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Lease or hire purchase: which suits a restaurant, café or pub?

Hire purchase is ideal for long-life kit you'll keep, a finance lease for kit you'll want to upgrade and an operating lease for short-term needs like a pop-up or a busy season.

Here are three examples of this in practice:

• A restaurant replacing its main oven. It'll stay in the kitchen for years, so owning it matters. Hire purchase spreads the cost and the company can usually claim capital allowances on it.
• A café fitting out its coffee bar. Espresso machines and tills date quickly. A finance lease keeps the monthly cost lower and lets you upgrade at the end of the term.
• A pub adding a summer garden kitchen. If you only need the kit for a season, an operating lease avoids buying something you'll mothball.

The detail matters at the end of the term, when you may be able to keep renting, return the equipment or upgrade. Our guides to finance lease vs operating lease and hire purchase vs a finance lease articles go through the differences in full.

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How much does catering equipment finance cost?

Equipment finance providers that support catering needs can offer borrowing amounts from around £500 up to £500k, with repayment terms from one to six years with small or even no deposits. The rate you're offered depends on your credit, the kit and the borrowing term, so compare the total amount repayable, not just the monthly payment.

Spreading the cost of catering equipment keeps cash free for wages, stock and rent, which is what managing cash flow in hospitality comes down to. But finance always costs more in total than paying outright.

Here are two examples to show potential terms and costs for hypothetical catering equipment needs:

Source: AssetFi, catering equipment finance. This broker says these are indicative only and pricing depends on credit, supplier, equipment and term. Ask any provider for the total amount repayable, fees and end-of-term charges before you sign an agreement.

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Catering equipment finance providers compared

Most catering equipment finance is sold by kitchen suppliers working with a panel of lenders, or by brokers. Below, we've compared the terms, limits and criteria for a range of highly cited UK suppliers and brokers:

Details above are sourced from the supplier/broker websites (accurate as of 12 October 2026). Terms and criteria are subject to change, so confirm them with the provider. If you need kit outside the kitchen, you can also compare equipment finance providers more widely.

iwoca isn't listed in the table above as we don't lease equipment or provide specific asset finance solutions.

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What do lease providers check, and do you need a personal guarantee?

Lease providers (or 'lessors') look at the equipment (and the value), how long you've been trading, your company's and directors' credit, plus certain bank statements or accounts. Many ask for a director to sign a personal guarantee, especially for newer companies.

Here's waht they usually ask about:

• The kit, its supplier and whether it's new or used.
• Your trading history and experience in hospitality.
• Business and director credit history.
• Affordability, usually from recent bank statements and, for larger amounts, filed accounts.
• Your premises, because kit bolted into a rented building is harder for a lessor to take back.

Personal guarantees are common in catering equipment financing. Next Day Catering says its leases "may require personal guarantees" and that finance companies may ask for "Directors Guarantees for some Limited Companies". eCatering asks new starters for a guarantor. A personal guarantee makes the director personally liable if the company can't pay, so read it before you sign.

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Can you finance used equipment and installation?

Some lessors fund used kit and installation and many don't, so ask before you buy. A kit quote also leaves out costs you'll still need to pay for.

Make sure you budget for the following:

• Installation and commissioning. Gas and electrical connections can add to the price. Ask whether the lessor will include them in the agreement.
• Extraction and gas safety. Extraction needs to suit your cooking, and gas appliances need a qualified engineer.
• Fixed items in rented premises. Canopies and cold rooms are built in. Check your lease on alterations and get landlord consent.
• Servicing. Hire purchase agreements don't usually include it. With a lease, check whether providers do include servicing.
• Second-hand kit. Check there's no outstanding finance on it and get a proper invoice from the seller.

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When a business loan fits better than a lease

A lease is built around one piece of kit, whereas a business loan suits better when the cost you need to cover isn't only the equipment. For example, lease deposit, used or auction equipment, or a fit-out that mixes kit with builders, stock and wages. While iwoca doesn't lease equipment, our Flexi-Loan can cover those costs.

A Flexi-Loan lets you borrow from £1,000 to £1m over up to 5 years. You draw what you need up to your limit, and you can repay early with no early repayment penalty. Interest is charged only on what you owe. Flexi-Loans are for UK limited companies and you'll need a personal guarantee from at least one director.

A business loan can make more sense than equipment finance when:

• You've found good used or auction kit that a lessor won't fund.
• A lessor wants a deposit or upfront rentals, and you'd rather keep cash in the business.
• Your refit includes builders, flooring, stock or wages while you're closed, not just equipment.
• You want to own the kit from day one and pay the supplier in full.

A lease or hire purchase is often the better fit when:

• You're buying one large new item and want the cost tied to that asset.
• You want to upgrade the kit at the end of the term.
• You'd rather keep a business loan free for other costs.

Whichever option you choose, make sure you compare the total borrowing cost. To see what a Flexi-Loan would cost, try our business loan calculator. If your borrowing is for the wider costs of running a restaurant, our dedicated page on restaurant loans covers them. Take a look.

Since 2012, iwoca has provided £5bn+ of funding to 100,000+ UK businesses.

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How to apply for catering equipment finance

Get a supplier quote, compare the total cost and end-of-term options from two or three providers, then send the documents they ask for. That's usually bank statements and, for larger amounts, accounts.

Applying for catering equipment finance usually involves the following steps:

1. Choose your kit and get a written quote, including installation.
2. Decide what matters most: owning the kit, a low monthly payment or the option to upgrade.
3. Compare offers on the total amount repayable, fees, deposit and what happens at the end of the term.
4. Send the documents the provider asks for, such as company and director details, bank statements and accounts.
5. Sign the agreement. With a lease or hire purchase, the provider usually pays the supplier directly.

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Catering equipment finance FAQs

Is leasing catering equipment tax-deductible?

Lease rentals are generally treated as a business cost, but you can't claim capital allowances on leased kit unless it's a long funding lease. With hire purchase, you can usually claim capital allowances, including the annual investment allowance, but not on the interest. Check with your accountant.

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Can a new restaurant or café get catering equipment finance?

Yes, some providers consider new businesses, but expect to be asked for more. CS Catering Equipment says it considers new start businesses. eCatering asks new starters for a guarantor. A business plan, a signed premises lease, a deposit or a director's guarantee can all help.

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Can I get catering equipment finance with bad credit or no credit check?

Any lease, hire purchase or loan involves a credit check, so be wary of anyone offering finance with no checks at all. Past credit problems don't always rule you out. Next Day Catering says its underwriters look at how long you've traded, the kit and current performance.

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What happens at the end of a lease?

It depends on the agreement. With a finance lease, you can usually keep renting, return assets or upgrade them. Meanwhile, with an operating lease, the kit goes back, whereas in a hire purchase agreement, you own it after the final payment.

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Can I finance a catering van or trailer?

Yes. Catering vans and trailers are usually financed like vehicles, often on hire purchase. Our guide to business van finance explains the options available.

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How quickly can I get a decision?

It varies by provider. Buzz Catering Supplies talks about a same working day turnaround, while others take a few days once they have your documents. With an iwoca Flexi-Loan, expect a decision within 24 hours of sending your documents, but it might be longer depending on the complexity of the request. Every new Flexi-Loan needs a personal guarantee from at least one director.