Financing a commercial kitchen fit-out

Ask a chef what a new kitchen costs and they’ll talk about the combi oven, the six-burner range and the blast chiller. Ask the builder and you’ll hear about the canopy, the ductwork through two floors, the grease arrestor in the car park and the coved vinyl that has to run up every wall. Both lists are right, and a good funding plan treats them separately, because lenders do.

Where does the money go?

Commercial kitchen budgets usually fall into five buckets:

1. Cooking and prep equipment. Ovens, ranges, fryers, grills, salamanders, mixers, slicers, benches and shelving.
2. Refrigeration. Under-bench fridges, upright freezers, a cool room or freezer room, display fridges and ice machines.
3. Warewashing. Pass-through or under-bench dishwashers, sinks and the hot water to run them.
4. Building services. The exhaust canopy and ductwork, make-up air, gas fit-off, electrical upgrades, plumbing, floor wastes and grease arrestor.
5. Surfaces and compliance. Washable wall linings, sealed floors with coving, hand basins, ceilings and lighting.

Buckets one to three are equipment a financier can register an interest over and, if it came to it, remove and resell. Buckets four and five become part of the premises. That single distinction drives every funding decision that follows.

The compliance items that move the budget

The food safety standards set the ground rules. Food Standards Australia New Zealand lists Standard 3.2.3, Food premises and equipment, as the standard that covers how a food premises is designed and fitted out, including matters like hand washing facilities, cleanable surfaces, ventilation, water supply and waste. Your local council enforces it and will usually want to approve plans before you start.

Three items regularly catch owners out:

• Exhaust canopies. Many councils require mechanical exhaust under AS 1668.2 once cooking equipment passes set thresholds. Several council guides use roughly 8 kW total for electric appliances or 29 MJ per hour for gas, and some treat any deep fryer as a trigger. Ductwork that has to run through a building to roof level can cost more than the canopy itself.
• Grease arrestors and trade waste. Water utilities generally require businesses discharging greasy waste to have a trade waste approval and a properly sized grease arrestor. If the site doesn’t already have one, installation can mean breaking up concrete and a lengthy approval process. Ask your water utility early.
• Food safety supervisor and staffing rules. Standard 3.2.2A requires most food service businesses to have a certified food safety supervisor and trained food handlers. It’s not a big capital cost, but factor training time into the opening budget.

Get your designer to check the council and utility requirements before you order equipment. Swapping a gas range for an induction suite after the canopy is designed is an expensive change.

Matching finance to the kitchen

What you’re paying for	Finance that usually fits	Points to note
Ovens, ranges, fryers, prep equipment	Chattel mortgage, hire purchase or finance lease	New, branded equipment is the easiest to fund
Cool rooms and refrigeration	Equipment finance or rent-to-own	Built-in cool rooms may be treated as fit-out, not equipment
Dishwashers and coffee machines	Rent or rent-to-own through the supplier	Often bundled with servicing
Canopy, ductwork, plumbing, grease arrestor	Cash, landlord contribution, business term loan or property-secured loan	No resale value to a lender
Opening stock, wages and a buffer	Cash or a business line of credit	Keep it separate so it’s only drawn when needed

Because equipment sits in leased premises, the financier may ask for a landlord waiver confirming it can access and remove financed items if repayments stop. Raise it while you’re still negotiating the lease, when landlords are most cooperative.

Pricing a kitchen right now? Tell us what you’re building. The enquiry takes about a minute and won’t show up as a credit enquiry.

New, used or rented equipment?

Each route has a place.

• New equipment comes with warranties, installation and the widest choice of lenders. Some suppliers also offer their own finance programs, which are worth comparing against an independent quote on the total cost in dollars.
• Used equipment from auctions, dealers or closing venues can halve the cost of some items. The trade-off is fewer financiers, shorter terms and no warranty. If you buy from a private seller, a PPSR search costs very little and tells you whether a previous owner’s financier still holds security over it.
• Rented or rent-to-own suits items that break, wear or need servicing, such as dishwashers, ice machines and coffee machines. Monthly costs are higher over time, but servicing is often included and you keep cash in the business.

Sizing the facility, step by step

1. Collect itemised quotes for equipment and building works separately.
2. Confirm approvals with the council and water utility so the design won’t change after you’ve borrowed.
3. Subtract what the landlord or the previous tenant provides, including any equipment left behind in working order.
4. Allocate the equipment to finance, the building works to cash or a term loan, and stock and wages to a line of credit.
5. Build an opening buffer. Plan for several weeks of wages, rent and supplier payments before takings settle. Our break-even calculator shows the weekly sales you’ll need to cover costs and repayments.
6. Add contingency. Kitchens built into older buildings tend to uncover surprises in drainage and electrical capacity.

Worked example: a 60-seat bistro

An illustration only. Two experienced chefs lease a former retail shop in a coastal suburb to open a 60-seat bistro. There’s no existing kitchen.

Item	Amount
Combi oven, range, fryers, grill and prep equipment	$118k
Cool room, refrigeration and ice machine	$46k
Dishwasher and warewash area	$14k
Canopy, ductwork and make-up air	$62k
Plumbing, grease arrestor and floor wastes	$38k
Wall linings, flooring, ceilings, electrical	$57k
Design, approvals and certifications	$15k
Total	$350k

The landlord contributes $50k toward the services works as part of a seven-year lease. The owners put in $80k of savings. They finance $150k of new cooking and refrigeration equipment over five years with a modest balloon, and rent the dishwasher and ice machine from the supplier with servicing included. A $70k term loan covers the rest of the building works. They keep a $40k line of credit untouched for the opening months.

Their bank was happy to fund the equipment but wanted property security for the term loan. One owner offered equity in an investment unit, which also allowed a longer term and lower repayments.

Banks first, then the alternatives

When you have hospitality experience, clean financials and property behind you, a bank is often the cheapest way to fund a kitchen, and it’s sensible to start there. Banks can be cautious about new venues, though, and their process doesn’t always keep pace with a builder’s schedule or a lease start date. Equipment financiers, non-bank lenders and private lenders fill that gap every day. See our pages on restaurant finance and cafe finance for how lenders view each type of venue.

From kitchen plans to an approval

The best-run kitchen fit-outs start with the boring parts: approvals checked, quotes split, buffer set aside. Once those are in place, the funding conversation becomes much simpler.

When you’re ready, our form takes roughly sixty seconds and doesn’t touch your credit file. We don’t sell or scatter your enquiry across dozens of lenders. One of our team looks at the details of your venue and calls you to talk through options. Put in honest numbers for the quotes, your experience and any existing trading, and we can point you at the right structure the first time.

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