Equipment Loan, Credit Line or Cash Advance: What Fits an Ardmore, OK Restaurant?

Kitchen equipment that lasts for years belongs on a note that runs for years. A combi oven, a fryer line or a walk-in cooler has a serial number, a vendor quote and a resale value, so it can secure its own loan when the partner agrees. Fixed ductwork is excluded; supplier setup and inspection can be listed separately.

Illustration only, invented figures: a fryer line and prep-table package quoted at $36,000, delivered, financed over 48 months at an invented annual rate of 10.5%. Each month the kitchen in this example pays $921.72; across all 48 months that is $44,242.56, with $8,242.56 of it going to interest. Testing other prices takes a minute with the calculator on the equipment financing page.

Full-service kitchens in the county are seldom tiny operations. County Business Patterns counted 45 full-service restaurants (NAICS 722511) in Carter County, OK in 2023, and only 11 of them, or 24.4%, had fewer than five employees, against 53.0% of all the county's employer establishments. A dining room with a dozen people on the schedule loses more than a menu item when the oven goes down. The restaurant industry page has the full county figures for both kinds of restaurant.

Food orders, a compressor that quits on a Friday, a dish machine part: these costs come back in different sizes every month, and none of them needs five years of payments. A line of credit fits them because the restaurant draws only what the bill calls for, pays it down from sales, and can draw again once the balance falls.

Illustration only, invented figures: a $6,800 compressor repair drawn on a line at an invented annual rate of 14%, then paid down $850 a week from sales. The balance is gone after 8 weeks, and interest on the falling balance comes to $82.38 by our arithmetic, charged weekly in this example.

• Food and supply invoices that come due before the weekend's sales are deposited.
• Repairs to equipment the restaurant already owns.
• Smallwares, uniforms and the extra stock for a catering job.
• A deposit on equipment while the larger note is being arranged.

A merchant cash advance is not a loan, since the provider buys a share of the restaurant's future card sales at a discount and collects it as a fixed percentage of each day's card deposits, called the holdback. The cost is fixed on day one by the factor: the amount collected divided by the amount advanced.

In this example the advance costs $3,824.56 more than the term loan for the same $20,000. In this example, at $2,800 of card sales a day, the holdback collects $280 daily, so the $25,600 is collected over about 92 card-sale days. On a slower day the provider collects less, which is the one real advantage of a percentage holdback; the total does not change.

The product that fits is the one whose term matches the life of what the money buys. How soon money arrives depends on the partner and on how complete the file is; it is not something this site sets, and it should not decide the product on its own.

An owner comparing kitchens by address can start from ZIP 73401, the office ZIP: its 2023 ZIP Code Business Patterns row shows 40 full-service and 34 limited-service restaurant establishments. Other articles for Ardmore, OK owners, from shop lifts to clinic expansions, are on the blog.