The backbone of your restaurant depends on the use of specialized equipment, the type that allows you to create surfaces that wow your customers. However, for every piece of restaurant equipment you need, there is the question of whether to buy or lease. In the post, we take you through leasing Admiral Craft BDECTC-16/NG commercial charbroiler. Both buying and leasing commercial charbroilers have their own unique cons and pros, and only after you consider all the facts will you be able to make a decision that is right for you and your restaurant.
Admiral Craft BDECTC-16/NG description
BDECTC-16/NG is a black diamond countertop charbroiler. It features 16″ W X 26″ D, (1) manual stainless burner control, radiant heat, cast iron reversible, and height-adjustable grates. This Admiral craft model has a stainless steel drip tray, splash guards, stainless steel front and sides, adjustable legs, and includes tips for field conversion to LPG. Admiral Craft BDECTC-16/NG is cETLus, and ETL-Sanitation classified.
Standard features of Admiral Craft BDECTC-16/NG charbroiler:
- 4″-5″ adjustable legs
- 30,000 BTU per burner
- ETL Listed and ETL Sanitation
- One stainless steel burner for every 12″ grate width
- Removable stainless steel drip tray for easy cleaning
- Cast iron grill grates are height adjustable and reversible
- Fully welded stainless steel backsplash for extra durability
- Separate gas valves for every burner with standing pilot ignition system
- Fully welded stainless steel front bullnose design with galvanized sides
- 3/4″ rear NPT gas inlet
Commercial charbroilers financing for restaurant
If you are looking to purchase Admiral Craft BDECTC-16/NG (we will assume through a loan), you will need to come up with a down payment, and the charbroiler will probably act as collateral. Most business loans also require two expenditures within the first payment period: the down payment and your first monthly loan payment. If you are purchasing with cash, you should run the idea through a tax consultant since she or he might advise you that there are better, more tax-friendly methods to buy restaurant equipment.
The best part is that loans enable you to claim a tax deduction for a section of the loan payment (as interest) and depreciation (linked to IRS depreciation schedules). It is always advisable to talk to your tax specialist before making any move since they will be aware of the present Internal Revenue Service (IRS) regulations.
The appliance you purchase is required to appear as an asset with a corresponding liability on your balance sheet. If you opt to buy, you will be accountable for many things: the whole life of the commercial charbroiler; tracking the appliance through its entire life cycle; managing all maintenance costs, taxes, interest, and insurance; and the disposal or selling of the appliance when it is obsolete or no longer of any use to you.
Admiral Craft BDECTC-16/NG leasing for restaurants
You are possibly already familiar with purchasing restaurant equipment, but leasing might be a new concept you have not considered. Following the Equipment Leasing Association (ELA), a non-profit organization representing businesses involved in equipment leasing, leasing provides many advantages compared to other financing methods (such as loans).
First, the IRS does not consider an operating lease to be a purchase. Following the IRS, it is actually a tax-deductible overhead expense, which indicates you can subtract the lease payments from your corporate income. An operating lease also is not considered a long-term liability or debt. This indicates the lease does not appear as debt on your financial statement, which, as a result, makes you more attractive to traditional lenders if you were to need a loan. And since lease payments are treated as expenses on your balance sheet, the appliance does not have to be depreciated over seven to five years. Typically this is equal to an immediate write-off of the dollars you spend.
In leasing restaurant equipment, there is very little money down needed. Also, since a lease does not require a down payment, it is equivalent to 100% financing (which indicates you will have more money to invest in revenue-generating activities). Leases also provide flexibility as you grow and your needs change. You can upgrade or add at any point during the lease term through add-on or master leases ( note that the ELA advises that if you anticipate growth, negotiate that option when you structure your lease program).
For instance, if you intend to acquire commercial charbroilers continually, a master lease that lets you acquire many appliances within a single lease (and avoid executing a new contract with each new equipment) might suit your needs. Equipment leases can even be customized to fit your month to month or year to year cash flow needs; they can be tailored for budget, cash flow, cyclical fluctuations, and transaction structure. For instance, some leases let you miss one or more payments without penalty.
A lease offers asset management since it tracks the use of appliances for specific periods at fixed payments. Better yet, the lessor presumes and manages the risk of equipment ownership. Equipment leasing also offers cash forecasting; you know the number and amount of lease payments over the life of your equipment lease. This way, you can accurately predict equipment cash requirements for your restaurant. And when the lease ends, there are various options for the appliance, including renewing the lease, returning it, or purchasing the equipment.
Finally, in an industry where having the latest technology can make or break you, a short-term operating lease can help you get the charbroiler you need and keep your cash. The ELA commends leasing any equipment you think will depreciate faster or will be out-dated soon.
Ways of leasing Admiral Craft BDECTC-16/NG
If you choose to lease your commercial equipment, you are not alone. Eight out of ten companies lease some or all of their equipment, following ELA. Typically, there are three ways to lease an appliance: you can choose and order the Admiral Craft BDECTC-16/NG and then find financing via a lessor, or you can select the equipment via a manufacturer or vendor that offers leasing, or you can get the equipment directly through a lessor.
The two most popular leases are finance and operating. An operating lease works well if you intend to update or replace equipment often. Moreover, operating leases let you use the appliance without ownership and return it at the lease-end. Generally, a finance lease is a full payout, non-cancellable contract in which you are responsible for maintenance, insurance, and taxes. This kind of lease is best utilized when you want the tax benefits of ownership or anticipate the equipment’s residual value to be high.
Your restaurant equipment financing lessor
Most equipment leasing companies will tailor payment schedule, lease pricing, end-of-lease options, and other elements that suit your needs. For instance, at Top Financial Resources, we offer a capital lease (also called $1 lease) that starts with the first or first and last monthly payments. Once the lease runs through the desired term, you would buy the appliance for $1 (you would have to depreciate this the same way you would a bank loan) at the end of the term. Top Financial Resources Operating Lease begins with first or first and last monthly payments; however, once it runs through the preferred term, at the ending of the lease term, you have the alternative to buy the equipment for a residual (usually, ten, fifteen, or 20 percent at the original price), or you can turn the appliance back in. In this situation, you would be able to write the payments off as a rental payment.
Another program, we offer 100 percent financing and the ability to incorporate soft costs like installation and training in your monthly payment. You will need a one-page application for restaurant equipment acquisitions up to $75,000. Even better, we have a calculator that helps you figure out what your payments might be. Just enter the commercial charbroiler cost you want to lease, and the calculator will provide your monthly payments for terms 60, 48, 36, and 24 months. Note your actual payment might be lower or higher based on your approval rating and funding options).
Top Financial Resources offers nationwide lease coverage; flexible payment options inclusive of deferred lease terms from one to seven years for both used and new restaurant equipment, skip payment plans; and numerous end-of-lease options.
Who can benefit from restaurant equipment financing and leasing?
Simply put, any restaurant that needs or wants a new piece of commercial equipment to grow or improve can make good use of restaurant equipment financing or leasing. Even though businesses that have particular traits have even more reason to lease or finance equipment, including:
- Restaurants in need of flexible equipment financing options
- Restaurants looking for fast access to funding
- Restaurants that are not able to provide collateral
Clearly, whether you opt to buy or lease commercial charbroilers, there is a lot to consider. However, by using the resources available to you, you can be assured you will be able to make the right choice for your restaurant and bank account.