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NGExpert financial copywriter
If you run any type of catering or food business, it’s important to have the right equipment, including commercial refrigeration appliances. But the best equipment comes at a cost and it won’t always be easily affordable for your business. This is where commercial fridge finance comes in.
Page written by Rachel Wait. Last reviewed on December 9, 2024. Next review due April 6, 2025.
Commercial fridge finance is a way of enabling you to spread the cost of commercial fridges for your business over a period of months. Many businesses simply won’t have the cash to pay for expensive equipment, so commercial fridge finance can help you acquire the equipment you need without making a huge dent in your business’ bank balance.
There are a number of benefits to financing a commercial fridge, as outlined below:
Commercial fridge finance lets you make small monthly payments rather than paying a significant sum of money in one go. This reduces the risk of cash flow problems and enables you to use that cash in other areas of your business.
Most commercial fridge finance agreements let you pay in fixed instalments, which can be ideal for budgeting. You’ll know exactly how much you need to pay each month and over how long. Typically, repayments will be made over a period of one to five years. If you choose a shorter term, your repayments will be higher but you’ll pay less interest overall. A longer term will mean lower monthly repayments, but you’ll pay more in interest in the long-run.
Commercial fridge finance can also have tax benefits as interest paid on business loans and lease payments might be tax-deductible. Your accountant can help you with this.
Many commercial fridge finance agreements will include other costs such as service and maintenance costs, which means you don’t have to fork out extra for these.
At the end of the term, you might have the option to extend the lease, make a balloon payment to own the fridge outright, or you might be able to return the fridge and upgrade to a newer model. This can be ideal if you want to change your kitchen equipment on a regular basis.
If you’re thinking of applying for commercial fridge finance, you’ll usually do this through a lease agreement or type of asset finance. This means that you rent the fridge from a provider and then pay regular fixed instalments over a set term. This helps to ensure your repayments are affordable.
At the end of the term, you will usually have the option to extend the lease, return the equipment, upgrade it, or buy it outright by making a balloon payment.
To qualify for a lease agreement, you might need to put in an order over a certain amount, but this will depend on the provider. You won’t necessarily need to have a perfect business credit rating to get commercial fridge finance as companies might also look into the length of time you’ve been trading and your business turnover in relation to the total cost of the equipment you wish to lease. If your business hasn’t yet started trading, you might be asked to show a business plan and future projections.
In some cases, you might be able to find a vendor or manufacturer that offers 0% finance. This usually means you spread the cost of your purchase over a period of up to 24 months and no interest is added to your repayments. Once you’ve made the final payment, the equipment is yours to keep.
If you’re thinking of this option, be sure to check whether there is a minimum purchase requirement and whether you need to put down an initial deposit. Also check whether there are any early repayment charges if you pay back the money early. You will usually need a good credit rating to qualify.
Some vendors might also offer an option to pay for your commercial fridge in short instalments, usually over a period of three months. This is often known as buy now, pay later (BNPL). However, it’s likely to be more suitable if you’re only buying one fridge, rather than multiple units, as you’ll usually need to pay it off in three equal, interest-free instalments.
There are a few options open to you if you want to finance a commercial fridge, so you’ll need to work out what’s best for you and your business.
If you’d prefer the flexibility of being able to make regular payments for a set time and then decide whether you want to upgrade your commercial fridge or even buy it outright, leasing might be the best choice. But if you don’t need this flexibility and are happy to own the equipment at the end of your agreement, you might prefer to look for a vendor that offers 0% finance instead.
Always check the terms and conditions of any agreement before you sign to be sure you’re completely happy with the arrangement. Check whether there are any fees and who is responsible for servicing and maintaining the equipment.
Whichever financing option you choose, never borrow more than you can afford to repay as missed payments can result in late payment fees and interest, and they can damage your credit rating. Always check that the finance provider is authorised and regulated by the Financial Conduct Authority (FCA) too.
Note that if you are a supplier or vendor looking to offer these products on finance, you can consider vendor finance as an option.
If you need help deciding whether commercial fridge finance is right for you and your business, the team at Swoop would be happy to help. We can talk you through the different options and help you find the right lender for your business. Get in touch today.
Swoop was amazing! I was looking for refinancing and they were straight onto finding me the best possible option. I would highly recommend them.
Owner, F45 Cambridge
Written by
Rachel has been writing about finance and consumer affairs for over a decade, helping people to get to grips with their finances and cut through the jargon. She's written for a range of websites and national newspapers including MoneySuperMarket, Money to the Masses, Forbes UK, and Mail on Sunday. Rachel has covered almost every financial topic, from car insurance and credit cards, to business bank accounts and mortgages.
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