Restaurant kitchen equipment is a significant investment. When starting a new restaurant or upgrading your existing one, you want to be sure you’re spending your money wisely on quality pieces that will last. But if you’re working with a limited budget, buying used kitchen equipment looks like a great way to get the gear you need without breaking the bank. But is that true?
- The Pros and Cons of Buying Used Restaurant Equipment
- Which equipment is not worth buying used?
- What type of equipment is worth buying used?
- Buying Used vs Leasing
- Used Restaurant Equipment Financing
- Insurance for used kitchen equipment
- Where to find good used restaurant equipment
- 5 Tips for Buying Second-Hand Kitchen Equipment
Used kitchen equipment can be a great way to save money on your restaurant start-up or upgrade. But to find the best deals, and the right equipment for your business is hard work. It’s important to do your research and know what you’re buying before making a purchase.
The Pros and Cons of Buying Used Restaurant Equipment
There are pros and cons to everything- and buying used restaurant equipment is no different.
You can save a lot of money by buying used restaurant equipment. Used kitchen equipment is often a fraction of the cost of new. If you’re working with a limited budget, this can be a great way to get the gear you need without breaking the bank. You can negotiate the price with independent sellers for an even better bargain
If you buy from the right sources, you can find gently used equipment that is still in good condition and will last for many years. This is usually the case with the restaurants that closed quickly or went out of business- the equipment is often only a few years old and in great condition.
Buying used allows you to try out different pieces of equipment before committing to a new purchase, which is especially helpful if you’re just starting out in the restaurant business.
You can also find unique pieces of used restaurant kitchen equipment that you might not be able to find new. This can give your restaurant a one-of-a-kind look.
Of course, there are also some potential disadvantages to buying used restaurant equipment.
The biggest downside is that it can be difficult to find quality used equipment. Not all sellers are honest and some may try to sell you something that is in poor condition or doesn’t work properly. There is always a risk when buying used restaurant equipment that it won’t work properly or will break down soon after you’ve made your purchase. This can be a big hassle and a waste of money if you’re not careful. It’s important to do your research and know what you’re buying before making a purchase.
Used equipment may not come with a warranty or guarantee, so if something goes wrong you’re on your own. With new equipment, you can usually get the manufacturer to help fix any problems that arise.
It can also be difficult to find exact replacements for used equipment if something does break and needs to be replaced. With new equipment, you can simply order the same model from the manufacturer.
Which equipment is not worth buying used?
There are some types of restaurant kitchen equipment that are not worth buying used. This includes any type of cooking equipment that uses gas or other flammable liquids, like gas rangers, propane deep fryers and griddles. If something goes wrong with this type of equipment, it could cause a fire. For this reason, it’s always best to buy new when it comes to this type of equipment.
You should also be cautious about buying used refrigeration equipment, such as fridges and freezers, since this is another type of equipment that can be dangerous if it’s not in good working condition. If you do decide to buy used refrigeration equipment, make sure to have it inspected by a qualified technician before using it in your restaurant.
Ice machines, whether they make ice cubes, or nugget ice, are another piece of equipment that you should be careful about buying used. Used ice machines can often harbor bacteria, which can be dangerous to your customers.
What type of equipment is worth buying used?
There are some types of restaurant kitchen equipment that are definitely worth buying used. This includes small appliances like blenders and mixers, which can be found for a fraction of the cost of a new one. You can also find good deals on dishwashers, ovens, and other large pieces of equipment. Just be sure to inspect the equipment carefully before making a purchase to make sure it’s in good working condition.
Buying Used vs Leasing
Another option to consider when outfitting your restaurant is leasing kitchen equipment. This can be a good option if you’re not sure how long you’ll need the equipment or if you don’t have the upfront capital to purchase it outright.
Leasing also has the advantage of giving you the option to upgrade to new equipment at the end of your lease, which can be helpful if your business has grown and you need to upgrade to larger or more advanced equipment.
Of course, there are also some disadvantages to leasing restaurant kitchen equipment. The biggest one is that you will never own the equipment outright, so you’ll never have the option to sell it or use it as collateral for a loan.
Leasing is also typically more expensive in the long run than buying, because you’ll be paying for the use of the equipment over time rather than all at once.
Which option is best for you depends on your individual circumstances and needs. If you’re not sure which route to take, it’s always a good idea to speak to a qualified accountant or business advisor to get their opinion.
Used Restaurant Equipment Financing
Equipment financing refers to a loan used to purchase business-related equipment, such as a restaurant oven, a vehicle, or a copy machine. Not many restaurant owners know that in some cases you can get financing even for second-hand equipment. When you take out an equipment loan, you’ll need to make periodic payments that include interest and principal over a fixed term.
As security for the loan, the lender may require a lien on the equipment as collateral against your debt, similar to how an auto loan works. Once the loan is paid in full, you own the equipment free of any lien. The lender may also impose a lien upon some of your other business assets or require a personal guarantee. If you fail to repay your loan, the lender could repossess your business assets, and even your personal assets if you gave a personal guarantee. You’ll need to carefully review the loan terms to understand your risk.
For example, if you’re opening up a restaurant, you’ll need a significant amount of equipment like a commercial range, ovens and a refrigerator. Let’s say the equipment costs total of $75,000: You apply and are approved for an equipment loan equal to 80% of the equipment’s cost, or $60,000.
This means your out-of-pocket expenses will be $15,000, and you can retain $60,000 in your cash reserves to offset all the other costs associated with a new business including marketing and advertising, permits and licenses and the cost of the space.
Insurance for used kitchen equipment
Just like with any other type of business, it’s important to have insurance for your restaurant. This is especially true if you’re buying used equipment, which may not be covered under your general business insurance policy.
There are a few different types of insurance that you should consider for your restaurant. The first is property insurance, which will protect your equipment in the event of a fire, theft, or another type of damage.
Finally, you may also want to consider product liability insurance, which will protect you in the event that something goes wrong with the equipment itself.
No matter which type of insurance you decide to get, be sure to speak to an insurance agent who specializes in restaurant insurance to make sure you’re getting the coverage you need.
Where to find good used restaurant equipment
There are a few different places you can buy used restaurant equipment. One option is online auction sites like eBay, which can be a great way to find good deals on used equipment.
You can also find high end second-hand equipment at commercial kitchen equipment retailers like the Webstaurant store, Chef’s Toys, and others. Buying from a retailer gives you the benefit of being able to see and touch the equipment before you buy it, which can be important when making such a large purchase. Some of them hold open auctions that are specifically for restaurant equipment, which are often advertised in trade publications.
Another option is to buy directly from a restaurant that is going out of business. This can be a great way to get high-quality equipment for a fraction of the cost, but you’ll need to act quickly since these sales often happen very fast.
Finally, you can also check with local restaurants or catering companies to see if they’re looking to sell any of their used equipment.
5 Tips for Buying Second-Hand Kitchen Equipment
1. Do your research
Just because an item is used doesn’t mean it’s a good deal. It’s important to do your research on both the item and the seller before making any purchase, whether it’s online or in person. Check for reviews of the equipment and the seller, and make sure you understand what you’re buying. If an item is missing parts or has significant wear and tear, it may not be worth the purchase, even if it’s discounted.
2. Know what you need
Before you start shopping for used kitchen equipment, take stock of what your restaurant needs. Make a list of the items you need and what functions they perform. This will help you narrow down your search and focus on finding the right pieces of equipment.
3. Consider the condition
When you’re looking at used kitchen equipment, pay close attention to its condition. If an item is significantly damaged or worn, it may not be worth the purchase. Check for signs of rust, denting, or other damage, and make sure all the parts are accounted for. If an item is missing manuals or important parts, it may be more trouble than it’s worth.
4. Compare prices
Just because an item is used doesn’t mean it’s a bargain. Be sure to compare prices of used and new items before making a purchase. Once you factor in the cost of repairs or replacement parts, a used item may not be such a great deal after all.
5. Get it in writing
Ask to see the appliance’s maintenance records. By reviewing maintenance or repair records you can find out important information about the equipment and how it’s been treated over its lifespan.
Before finalizing any purchase, be sure to get everything in writing. This includes the price, condition of the item, and any warranty or return policy. This will protect you in case there are any problems with the item after you’ve made the purchase.
With these tips in mind, you can be sure you’re getting a good deal on quality equipment that will last.