For a hood replacement or a new walk-in, equipment financing secured by the equipment usually fits best, because the payments run across the years the equipment works. A full remodel suits a term loan, and a merchant cash advance suits only a short bridge, since it is not a loan and costs more over short periods.
An article from Quillhaven Financial in Huntington, West Virginia on funding a kitchen hood or walk-in: a hood against a full remodel, keeping the kitchen open, equipment financing, buying a restaurant with its equipment, an invented project priced three ways and the permits to check.
Restaurant Loans for a Hood Replacement Versus a Full Remodel
A hood replacement is a defined project: remove the old hood, install a new hood and fire-suppression system, connect ductwork and make-up air, and pass inspection. It is mostly equipment and installation, which suits equipment financing or a short term loan.
A full remodel adds walls, flooring, plumbing, electrical work, seating and design, and may close the restaurant for longer. It is a construction project, usually funded with a term loan, sometimes with separate equipment financing for the kitchen items.
Cabell County, WV had 222 restaurants and other eating places with employees in 2023, including 87 full-service and 109 limited-service restaurants (County Business Patterns). The restaurant page covers the broader funding choices.
How to Finance a Restaurant Kitchen Upgrade Without Closing for Weeks
Closing a kitchen means losing sales while the costs keep coming. Some steps reduce the closed time:
- Get the permit and inspection timing from the city before the equipment is ordered.
- Schedule installation for the slowest days of the week or a planned short closure.
- Ask the vendor to stage equipment on site before the old unit is removed.
- Line up the fire-suppression contractor and inspector in advance.
- Keep a line of credit or cash reserve for wages during any closed days.
Financing the work rather than paying cash keeps the reserve available for those days.
Commercial Kitchen Equipment Financing for Walk-Ins and Hood Lines
Walk-in coolers and freezers, hood systems, ranges and ice machines are kitchen items commonly financed separately, because they are expensive and last for years. Equipment financing secured by the units spreads the cost and leaves the restaurant's cash for food and payroll. The equipment page has a worked walk-in example.
Ask the vendor to separate equipment, freight and installation on the quote. Some partners finance installation on the same terms, and some set different terms for it.
How to Buy a Restaurant Business With Its Equipment Included
Buying a restaurant with its equipment included is a business purchase, usually funded with a term loan sized on the seller's records. The equipment is part of what is bought, and its age and condition affect the price and the lender's view of collateral.
Ask for an equipment list with ages and service records, and budget for replacing anything near the end of its life. The term loan page and the article on buying a business cover the purchase itself.
Leased equipment is a common surprise in a restaurant sale. Dish machines, ice machines and point-of-sale systems are sometimes leased rather than owned, and the lease may or may not transfer to a buyer. Ask the seller which items are owned outright, which are leased and which carry a lender's lien.
An Invented Hood-and-Walk-In Project Priced Three Ways
Illustration only, invented figures: a kitchen in Huntington, WV prices a new hood and suppression system at $38,000, a walk-in cooler at $24,000 and installation at $9,000, a total of $71,000 (our sum).
| Option | Terms | Payment or collection | Total paid |
|---|---|---|---|
| Equipment financing | 60 months, invented annual rate 10.25% | about $1,517 a month | about $91,037 |
| Term loan | 36 months, invented annual rate 12.5% | about $2,375 a month | about $85,507 |
| Merchant cash advance | invented factor of 1.3 | a share of daily card sales | $92,300 |
In this invented comparison, the equipment loan has the lowest payment and runs longest. The term loan costs less in total than the equipment loan here but has a higher payment. The invented advance is not a loan; it costs $21,300 and is typically collected within months, which takes cash from daily sales when the kitchen most needs it.
Permits and Licenses to Check Before the Kitchen Work Starts
In Huntington, WV, work on a hood and its systems needs a building permit under the city code, with inspections under the adopted building, plumbing, electrical and fire codes. A new owner or a new use needs a Certificate of Occupancy. A restaurant serving alcohol holds a WV ABCA license, and changes to its floor plan need ABCA approval.
The zoning and permit guide and the ABCA license guide cover each step.
Permit fees and any required upgrades found during inspection, such as electrical service or ductwork, are part of the project cost. Ask the contractor to include an allowance for them, so the amount requested covers the whole job rather than the equipment alone.
By Quillhaven Financial · Updated
