Although many will use these two terms synonymously, there’s actually a slight difference between equipment financing and leasing—with financing, you’ll formally own the equipment, but with leasing, the lender will formally own the equipment as you use it, and you can choose whether or not you want to purchase it for fair market value at the end of your lease.
Restaurant equipment financing means that your restaurant will be the legal owner of the equipment you’re using—and can calculate this equipment into your restaurant’s total assets. That said, your restaurant equipment might be obsolete by the time you finally pay it off in full. And though you might own the equipment, you’ll be saddled with outdated gear that you’re not necessarily glad you own.
That’s where restaurant equipment leasing wins out over financing—you’ll simply have to pay for your equipment on a monthly basis. If your leasing agreement expires, and you want to upgrade, you can choose not to purchase the equipment for fair market value.
If you anticipate your restaurant quickly outgrowing the equipment that it needs right now, then you might consider looking into restaurant equipment leasing rather than financing.
However, equipment leasing is typically much more expensive compared to equipment financing.