Buy Used Commercial Kitchen Equipment in Australia, the solution for many in the hospitality sector to prevent liquidation, insolvency and closure.
Although many people who start a business in the hospitality space may not take this into account when opening a hospitality business.
It can mean the difference between the long term success or the failure of the business.
For many businesses in the hospitality sector including – cafes, restaurants, bakery, catering, events, hotels, motels, B&B’s (Bed & Breakfast establishments).
Things are uncertain, particularly for businesses that have laden themselves with debt, loans, finance, leasing and flexible funding.
Although rising costs are affecting many businesses.
Any business that has to repay loans and finance have not necessarily budgeted for this sharp increase in interest rates and additional costs and as a result these businesses are being hit even harder.
Increase in Business Expenses:
There have been increases in:
- Rent
- Wages
- Food – Produce
- Insurance
- Electric
- The cost of Brand New Equipment
- Brand New Equipment Repayments
- Loan Repayments
Risks for Businesses Buying Brand New Equipment Vs Used Equipment:
Take into account a business that has to repay the cost of all the brand new equipment along with the costs of the fit out of the business.
Then compare this to the business owner who purchases all equipment used – second hand for a fraction of the cost.
This business owner, does not owe a cent on brand new equipment finance, flexible funding or commercial loans.
The business also takes care of the fit out themselves by shopping around for more reasonable options and even some used / second hand options where available.
Why a business should not use Financing or Flexible Funding Options to purchase Equipment:
After reading a news article published on 9News ‘Insolvency tsunami’ has arrived, Construction and Hospitality Hit Hard.
With Rental increases rising over 7.8%
Insurance increases rising to over 16.4%
Inflation continues to rise and Interest rate cuts are further away.
Equifax’s Scott Mason said “the trend raised serious questions about the survivability of many businesses – particularly SMEs and sole traders in construction and hospitality”.
“These business owners are having to make some extremely difficult choices around whether to prioritise paying their business or personal expenses,” Mason said.
This news article didn’t come as any surprise.
There are way too many businesses in the hospitality sector that have been provided with financed equipment / flexible funding (credit to purchase brand-new equipment).
Research clearly shows Finance – Flexible Funding Options can get a business into serious trouble:
Without the viability of the business being assessed or the business owner having to produce a business plan or the feasibility of the loan / funding repayments being assessed of how the business owner is going to be able to make the repayments.
Let alone take into account any rises in interest rates, business costs, inflation etc.
Almost anyone can purchase brand new equipment using using credit / flexible funding / leasing as long as they are a resident in Australia.
Without taking into account their ability to be able to make the repayments for this brand new equipment. A potential recipe for disaster.
Naturally this does not bode well for many of these businesses. The proof is in the pudding as they say, which is why many businesses in this space have been hit particularly hard.
Don’t take the risk?
To ensure a restaurant or cafe doesn’t become another one of these insolvency statistics, what can a business do to ensure that they are able to stay afloat and continue to generate profit during these uncertain times?
Buy Used Commercial Kitchen Equipment – As it provides a business with lots more certainty, stability, flexibility and viability.
Also available – Used Bakery Equipment for Sale
Used Commercial Kitchen Equipment – Quality Brands at Affordable Prices.
