Equipment finance for New Zealand hospitality businesses.

Because equipment installed into leased premises is exposed to the tenancy. A facility running longer than the lease leaves payments on a fit-out in a building the business may no longer occupy, so lenders shorten the term, seek a deposit or require a guarantee. The lease term and any renewal rights are examined as closely as the trading history.

The proportion that can be unbolted and resold, which is the security a lender is actually relying on. Combi ovens, dishwashers and under-bench refrigeration are recoverable. Extraction, walk-in rooms and made-to-measure benching largely are not. A fit-out weighted toward the second kind commonly attracts a deposit for that reason.

They are close to universal. A director’s guarantee is a separate obligation that survives the company’s position, and it is standard across New Zealand hospitality equipment lending. Where a sole trader’s borrowing is wholly or predominantly for personal use, the Credit Contracts and Consumer Finance Act can also apply, which is a narrower case.

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

Rarely. They are more common in rural lending, where seasonality is universal and understood. Most New Zealand hospitality operators carry the mismatch between flat repayments and seasonal revenue themselves, and manage it with a working-capital buffer sized against the off-season rather than an average month.

It is a genuine option where cash is tight and the menu is flexible. The trade is no warranty, frequently no service history, and shorter and more expensive finance where any is available at all. Buying the reliable items new and the peripheral items used is a common middle path.

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

It depends entirely on the lease. Some leases treat tenant fixtures as the landlord’s at the end of the term, some require reinstatement, and some are silent. This interacts directly with a financier’s security position, which is why lenders read the lease and why a solicitor is the right person to advise on it.

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

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 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.

A food control plan and its verification, gas and electrical certification, extraction cleaning to a standard, licensing where alcohol is served, and make-good obligations under the lease. None are covered by a finance agreement, and make-good in particular falls years later and is rarely budgeted at fit-out.

It can be, and the useful lives differ enough that separate terms often fit better. Kitchen equipment runs for years while point of sale hardware is replaced on a shorter cycle, and much of a modern point of sale package is subscription that cannot be financed at all.