How to Finance a Restaurant Fitout in Kariong

Setting up a restaurant in Kariong requires capital for commercial kitchen equipment, refrigeration, furniture, point-of-sale systems, and everything else that goes into a working venue.

Most operators we work with on the Coast need between $80,000 and $250,000 for a full fitout, depending on the size of the space and whether they're taking over an existing kitchen or building from scratch. Hospitality equipment finance lets you spread that cost across monthly repayments while keeping cash available for stock, wages, and the first few months of trading when revenue is still building.

Why Asset Finance Works for Restaurant Fitouts

Asset finance is structured around the equipment itself, not just your balance sheet. The lender takes security over the items being funded, which can make approval more straightforward than applying for an unsecured business loan. You purchase what you need now and repay the cost over a term that matches how long the equipment will be in use, usually between three and seven years.

Because the assets are new and identifiable, lenders can offer terms that work with the cashflow pattern of a restaurant, including options like chattel mortgage where you own the equipment from day one, or hire purchase where ownership transfers after the final payment.

Chattel Mortgage vs Hire Purchase for Hospitality Equipment

A chattel mortgage is the most common structure for restaurant fitouts. You own the equipment immediately, the lender registers a mortgage over it, and you claim the GST back at settlement. Monthly repayments include principal and interest, and you can claim depreciation and interest as tax deductions.

Hire purchase works differently. The lender owns the equipment until the final payment is made, which means you can't claim depreciation during the term, but you also don't show the asset on your balance sheet. This can suit operators who want to preserve borrowing capacity for other purposes or who are leasing the premises and don't want long-term asset commitments.

For most restaurant owners, chattel mortgage delivers the tax outcome and ownership structure that makes sense, particularly when you're fitting out a space you expect to operate from for years.

What Gets Included in a Fitout Finance Application

You can fund most items that form part of the working venue. Commercial ovens, grills, fryers, dishwashers, coolrooms, preparation benches, exhaust systems, furniture, bar equipment, and point-of-sale technology are all standard.

Some lenders will also cover installation costs if they're invoiced as part of the equipment supply. What usually doesn't qualify is structural work like plumbing, electrical upgrades to the building, or cosmetic work such as painting and flooring. Those items need to be funded separately, either through working capital or a commercial loan if the amount is large enough.

How Deposit and Repayment Terms Affect Monthly Cashflow

Most hospitality equipment finance is written with a deposit between 10% and 30%, though some lenders will go to 100% of the invoice value if your business has established trading history or you're providing a director guarantee.

Consider a scenario where a new venue in the Kariong industrial precinct needs $150,000 in kitchen and dining equipment. With a 20% deposit, the loan amount would be $120,000. Over five years at current commercial rates, monthly repayments would sit around $2,400 to $2,600 depending on the lender and the strength of your application. That repayment needs to be manageable alongside rent, wages, and supplier invoices during the early months of operation.

If cashflow is tight in the first year, some lenders offer a balloon payment structure where a portion of the principal is deferred to the end of the term. A 20% balloon on the same loan would reduce the monthly repayment to roughly $2,000, with $24,000 due at the end of year five. You can refinance that balloon, pay it from revenue, or sell and upgrade equipment at that point.

Vendor Finance and Dealer Programs for Kitchen Equipment

Some suppliers offer vendor finance directly, where the equipment provider arranges funding as part of the sale. These programs can be faster to approve and may not require as much documentation as a bank application, but the interest rate is often higher and the terms less flexible.

We regularly see vendor finance quoted at rates 2% to 4% above what's available through a broker-arranged facility. If speed matters and you're ordering from a supplier with an in-house program, it's worth comparing the vendor's offer against what you can access through a lender who specialises in hospitality equipment finance. The difference over a five-year term can be several thousand dollars.

Tax Benefits and Depreciation on Commercial Equipment

Under a chattel mortgage, you can claim the interest portion of each repayment as a business expense, and you depreciate the equipment over its effective life as set by the ATO. Most commercial kitchen equipment depreciates over five to ten years depending on the item, and that depreciation reduces your taxable income each year.

If your business is registered for GST, you claim the GST component of the purchase price back in your next business activity statement, which means you're only financing the GST-exclusive amount. On a $150,000 fitout, that's a $13,636 refund that can go straight into working capital.

Your accountant will calculate the exact depreciation benefit based on your business structure and tax position, but for most operators, the combination of interest deductions and depreciation makes the effective cost of finance lower than the stated interest rate.

Approval Timeframes for Fitout Finance in Kariong

If you're an established business adding equipment or refitting an existing venue, approval can happen within 48 hours once the lender has your financials and equipment quotes. For a new restaurant with no trading history, expect one to two weeks while the lender reviews your business plan, lease agreement, and personal financial position.

We work with operators across the Coast who are often working to tight timelines between signing a lease and opening the doors. Having your financials organised, a detailed equipment list with supplier quotes, and a clear business plan makes the difference between funding that's ready when you need it and delays that push back your opening.

Call one of our team or book an appointment at a time that works for you. We'll walk through your fitout plan, compare lenders who work with hospitality businesses in Kariong, and structure the application to match your cashflow and tax position.

Frequently Asked Questions