Guide

The oven, fryer or hood failed. Do you finance a replacement or fund the repair?

Repair is working capital: a short-term loan or advance on your deposits, funded in one to three business days. Replacement is equipment financing: the new unit secures the loan, terms run three to seven years, and it is materially cheaper. The rule of thumb kitchen techs use is that a repair costing more than half of a replacement, on a unit past two-thirds of its life, is money spent on the wrong thing.

Decide repair or replace before you decide anything about money

A commercial convection oven or a fryer lasts about ten to fifteen years with service. A hood and its exhaust system longer, but a fire-suppression failure means the line is closed by code until it is fixed, whatever it costs.

The question the tech will help you answer is age against cost. A $1,800 igniter and control board on a three-year-old oven is a repair. The same bill on a twelve-year-old one is a down payment on a problem that is coming back. The forums where operators compare notes settle on the same rough rule: over half the cost of new, on a unit past two-thirds of its expected life, replace.

Get that answer first, because it decides which product you are applying for, and applying for the wrong one costs real money.

Repair: working capital, fast and short

A repair invoice is paid with a working capital loan or a cash advance sized to your deposits. Decision in about a day, money in one to three business days. Card-heavy restaurants underwrite easily because settlements are the cleanest deposit pattern there is.

Amounts run half to one and a half times a month's deposits, which for a restaurant depositing $50,000 a month means offers from about $25,000. Most single-unit repairs are a fraction of that; borrow what the invoice says, not what the offer says.

Replacement: equipment financing, slower by two days and cheaper by a lot

A new oven, fryer bank, or hood package is an asset the lender can value and recover, so it finances as equipment over three to seven years at pricing that approaches a bank's. The vendor is usually paid directly, and used units from a dealer are fine.

It takes two to five business days rather than one to three, because the lender wants the quote and the serial numbers. In exchange, a $15,000 replacement costs a fraction in financing of what the same $15,000 costs as a six-month advance.

A hood and fire-suppression replacement is the one case where speed can override price: if the line is closed, every day is a day of zero. Fund the interim with working capital if you have to and refinance the unit as equipment once it is installed.

Cost of $50,000, by product

BANK TERM LOAN60 months · hardest to qualify for$13,700SBA 7(A)120 months · lowest monthly, slowest$34,200ONLINE TERM LOAN18 months · days, not months$11,500LINE OF CREDIT12 months · pay only on what you draw$7,400MERCHANT CASH ADVANCE9 months · fastest, no score floor$15,000$0$36,000
Total cost of capital on a $50,000 facility, with the term stated on every bar — a comparison that hides the term is not a comparison. An advance is the most expensive money here and the only one that reaches a business the bank has already declined. Illustrative figures at mid-range pricing, not an offer.

What a bad week does to your file, and what to do about it

A closed line shows up as a dip in the deposits. Apply the same week rather than next month, so the dip is in the current week and not the underwriter's sample.

Attach the quote. A funder reading a $6,000 repair invoice next to a $6,000 request understands the file in one glance. Round numbers with no explanation are what get questioned.

Sources

Related questions.

Can I finance used restaurant equipment?
Yes, through most equipment lenders, usually with a shorter term. Used equipment from a dealer with a warranty finances more easily than an auction lot.
Does a Section 179 deduction apply to a replacement oven?
Generally, new or used equipment placed in service in the tax year can be expensed under Section 179 up to the annual limit. Financed equipment qualifies the same as cash-bought. The IRS publication on depreciation is the authority; ask your accountant how it lands for you.
The landlord owns the hood. Whose problem is it?
Check the lease. Built-in ventilation is often the landlord's fixture and their repair obligation, while cooking equipment is yours. A landlord who is slow to act may accept you funding the repair against rent, in writing.

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