A bar equipment lease should certainly be considered as opposed to an outright purchase. The full cost of brand new or used appliances for both the bar and the kitchen equipment can be very costly. These options should be discussed with both your banker and especially your accountant.
There are companies who will lease and maintain equipment for a contracted period of time. At the end of the contract you have two options, renew the lease or upgrade the equipment and begin a new lease.
Advantages to leasing are:
Your money isn’t tied up in equipment and you have money for day to day expenses, working capital and cash flow.
There are no extra repair or maintenance costs as they are usually included in the lease costs.
The leased equipment is new and when the contract is complete you can replace the equipment and start a new lease. It is thought that equipment should be replaced every 10 years.
Leasing provides tax breaks as leasing may be fully tax deductibles as an operating expense as opposed to outright purchase where you can depreciate your purchase over a period of time.
The leasing company probably has a great variety of equipment to choose from allowing you to obtain exactly what you want.
With many leases you can buy the equipment at the end of the lease and because it is used you can usually buy at a good price. Rest assured that the leasing company do not want the expense of removing the equipment.
Leasing is a good option for ice machines, coolers, dishwashers, grilles, stoves and ovens. In the case of coffee makers you can often get these for free if you buy the coffee and other coffee products from the supplier.
It is not unusual if buying equipment to save between 40% and 60%. You must carefully inspect or have a technician person inspect the equipment to ensure it is in good operating condition.
Suggested inspection procedures are:
Take into account moving and installation costs because when you include this it may be better to buy new as new usually had free installation.
Are written guarantees available on the used to equipment to ensure it doesn’t break down soon after it is installed.
Be especially wary of used electrical appliances as these items are more likely to have problems than their gas counterparts. You cannot be sure of previous maintenance. Bring an electrician with you as he can inspect all electrical connections. He will advise what repairs are necessary if indeed it can be repaired.Do a basic visual inspection to ensure all knobs and parts are there.