With staffing pressures set to ease, cafes, restaurants, pubs and caterers may now be looking to upgrade facilities with workable hospitality equipment finance. The hospitality industry has been extremely hard-hit both during the pandemic and through the ensuing period. In addition to strict social distancing rules which limited venue capacity and hence ability to trade at optimum levels, the staffing situation reached critical levels.
The departure of many international students and workers due to the pandemic and many hospo workers moving industries to source more reliable work, left the sector in dire straits. Add to that the isolation rules and resultant spike in COVID-related sick leave and the inability to source temporary staff which caused many to cut back on trading hours and days.
After a long time in this critical position, the sector may now be able to look forward to better times due to some of the outcomes from the Jobs Summit. Look forward to better staffing prospects, improved trading opportunities and the chance to upgrade facilities and equipment.
From the Summit, a number of key actions have been slated to occur over various timeframes. Actions tagged as ‘immediate’ which may be of particular benefit to the industry include:- the increase in the intake of migrant workers; boosting government departments to process the backlog of visa applications; easing of restrictions around work for international student graduates; and new rules around maximum earnings for aged pensioners.
These should be good news for many in the industry and positive signs that businesses have a pathway to return to better trading conditions. For many, it will mean upgrading and replacing equipment and possibly the venue to boost trade by attracting new customers.
But after an extended period of reduced trade, those upgrades will likely require extremely cost-effective finance in order to make them workable and possible. Business Finance assists operators in the sector with a range of hospitality equipment finance products and cheaper interest rates.
Hospitality and Catering Equipment – what can be financed?
We provide finance for a vast selection of different types of venues in the hospitality sector and the broader catering industry. These include:- restaurants, hotels, pubs, cafes, clubs, accommodation providers, catering companies, care homes and business premises with catering facilities, food processing and preparation operations, staff canteens, entertainment venues and many others.
Specialising in the area of business equipment finance, we finance a large and diverse range of equipment:-
- Kitchen upgrades and fit-outs either of individual equipment or complete overhauls.
- Refrigeration, commercial cooking equipment, cold storage and general storage.
- Bar equipment including systems for dispensing, beer line systems and specialised racking.
- Furniture, fixtures and fittings for the customer areas.
- Back-of-house facilities and systems including POS, IT, communications, security and entertainment systems.
- In addition to many.
If you have plans to upgrade certain equipment and would like a quick answer on whether or not we can assist with finance, please give us a call.
Finance Options
Hospitality industry equipment can be financed through the choice of business equipment finance products, which included:-
- Chattel Mortgage aka Equipment Loan
- Equipment Leasing
- CHP – Commercial Hire Purchase
- Equipment Rent to Own
Deciding which particular finance product is best suited to the business set-up should involve a discussion with the accountant for the business as many of the deciding factors relate to accounting matters.
Our consultants will then handle sourcing the best offer including negotiating on interest rates and the structure of the loan. This individual and personalised attention to finance structure can be critical to achieving a workable option. Achieving the finance term, residual or balloon option and the total finance amount which lenders will approve, all contribute to the monthly payment and as such, affordability for the operator.
Despite the issues which the hospitality industry has faced over the past 2+ years, new operators are still entering the sector. Sourcing finance for new businesses can be challenging as some lenders will have conditions on minimum trading periods for loan approvals. We assist operators in this position through No Doc and Low Docs Hospitality Equipment Loans. We have non-bank lenders that offer greater flexibility and the opportunity for many new operators to secure cost-effective finance at workable interest rates.
Achieving Cheaper Interest Rates
It’s no secret that interest rates have been rising over the past 6 months. The RBA has increased the official cash rate for consecutive months and has indicated additional rises will be required. This has resulted in lending interest rates being raised across many markets. Rates are varied with many of our lenders remaining extremely competitive.
In this rising rate period, operators requiring finance need to be more astute in order to secure the cheapest equipment finance rates. With multiple lenders in our lender panel, including specialists that work only with their selected brokers like ourselves, we are well-placed to source the cheapest rates.
Businesses can optimise the outcome of upgrading hospitality equipment by considering tax measures such as temporary full expensing. This expires at the end of June 2023 so the decision to upgrade equipment now, could be opportune in many ways.
Contact Business Finance on 1300 000 033 to source cost-effective hospitality equipment finance.
DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS.
