Commercial kitchen finance for New Zealand hospitality.

It covers the fit-out as a whole rather than a single machine, typically twenty to forty items from the combi oven and range through to refrigeration, dishwashing, benching, extraction and smallwares. Lenders normally write it as one facility against an itemised schedule, with a security interest registered on the Personal Property Securities Register.

Because equipment installed into leased premises is exposed to the tenancy. A five-year facility behind a three-year lease with no renewal right leaves two years of payments on a kitchen the business may no longer occupy. Lenders respond by shortening the term, seeking a deposit or asking for a guarantee, so the lease term is worth establishing before the equipment is quoted.

Fit-outs commonly run from $40,000 for a small cafe to $250,000 or more for a full restaurant kitchen. The figures on this page are indicative bands rather than quotes. The split between loose equipment and installed work varies enormously between sites, and that split matters more to the finance than the total does.

Because it is the security the lender is actually relying on. A combi oven, a dishwasher and under-bench refrigeration can be unbolted and resold. Extraction, walk-in rooms and made-to-measure benching largely cannot. A fit-out weighted toward installation means the lender is effectively unsecured on part of it, which shows up as a deposit.

It is harder and it happens. A personal guarantee is close to universal, a deposit is commonly sought, and some lenders decline start-up fit-outs entirely. A trading history in any hospitality format, including a food truck or a catering business, materially improves the position even where the fixed site is new.

It is a genuine option, particularly where cash is tight and the menu is flexible. The trade is that used hospitality equipment has no warranty, service history is often unavailable, and the finance available against it is shorter and more expensive. Buying the reliable items new and the peripheral items used is a common middle path.

Under a hire purchase, a GST-registered business is generally able to claim the GST on the full purchase price in the return covering the period the agreement begins rather than spreading it across the payments, subject to the accountant’s confirmation of the accounting basis used. Under an operating lease the GST is typically claimed on each rental as it is invoiced, again subject to the accountant’s confirmation.

It depends entirely on the lease. Some leases treat fixtures installed by the tenant as the landlord’s at the end of the term, some require the premises to be reinstated, and some are silent. This interacts directly with a financier’s security, so it is one of the clauses a lender reads and one a solicitor is the right person to advise on.

Settlement on a fit-out is frequently staged. The financier commonly pays suppliers directly against invoices as equipment is delivered, and the first repayment usually falls a month after final delivery rather than after the first item. That timing is worth confirming, because it affects cash flow through the fit-out period.

A food control plan is required before a commercial kitchen can operate, gas installations carry certification requirements, extraction systems have their own compliance and cleaning obligations, and grease trap requirements vary by council. All of those are operating costs rather than purchase costs and are budgeted separately from the repayment.

Frequently, and it is also less flexible. A fitted site avoids most of the capital cost and opens faster, at the price of a kitchen designed for somebody else’s menu. Whether that constraint is acceptable is a concept question rather than a finance one, and it is worth answering before comparing the numbers.

The financier recovers what can be economically removed, which is the loose equipment rather than the installed work. That equipment is sold into a market with plenty of supply, so it commonly realises well below its cost, and the difference between the proceeds and the balance owing typically remains payable by the business and by any guarantor.