Did you know that between 2016 and 2021, the commercial refrigerator manufacturing industry in Australia grew an average of 1.9 percent per year? With the rise of ready-to-eat foods and take-away options, commercial refrigeration and its equipment are more popular than ever.
If you run a business that relies on a commercial refrigerator, one common concern you may have is if you should buy or lease the equipment you need. How can you choose the right option for you and your business?
Let us take a close look at these options to ensure you can obtain the best commercial refrigerator for your business.
Leasing a Commercial Refrigerator
If you are working with a limited budget, leasing a commercial fridge may make more sense than purchasing one. Read on for the pros and cons of this option.
Pros of Leasing
To lease a commercial refrigerator, you do not have to raise the kind of funds you would have to have to buy one. You can get quick access to the equipment you need without huge amounts of capital. If you are depending on loans to get your business off the ground, you can choose to lower expenses by deciding on leasing.
If you run a pop-up restaurant or temporary kitchen, leasing can be a good way to start. You may not be sure of how successful the project may be and you do not want to invest a huge amount of capital purchasing equipment until you are certain the restaurant is a good idea.
Leasing equipment for your business can also be tax-deductible. You may be able to deduct leases as costs of running a business.
When you lease a commercial refrigerator, you also do not have to worry about paying for major repairs for the equipment. If the refrigerator stops working, it will be up to the company you have leased it from to repair it or replace it.
Many companies offering leases of equipment also offer the chance to upgrade equipment.
Cons of Leasing
At the end of the lease, you do not have anything you can trade for equity. Unlike when you buy a piece of equipment, with leasing you do not get a chance to put it on sale once you no longer need it. This means that you will not get any kind of return on the investment of leasing the commercial refrigerator.
It is also not always an option to lease the equipment you need. There are brands of equipment you may not be able to get or specific features that the equipment up for leasing cannot offer. Why limit your options?
When you lease, you are responsible for someone else's equipment. If you or one of your employees damage the refrigerator, the repairs will be your problem.
You also run the risk of facing early termination fees if you want to switch providers while leasing. If you are unhappy with the quality of the equipment you are leasing, it is not a simple process to terminate the lease and choose another provider. You may face substantial termination fees.
Buying a Commercial Refrigerator
For most business owners, the right choice is to buy the equipment they need. Let us see the pros and cons of this option so you can make the right choice.
Pros of Buying 
Buying a commercial refrigerator is the simplest and quickest option. The process of leasing takes a long time, requiring you to fill out lots of paperwork stating how long you want to use the equipment, what you will use it for, and more. That is not the case when you buy.
You can also get exactly the kind of equipment you want. You can shop around until you find the features you want without any limitations. You can look for the latest commercial refrigerator models to stay at the cutting edge of your industry. This includes having choices like adding the chance to upgrade your model or customize it in the future.
When you buy equipment, you will usually get five to ten years of warranty coverage. If the equipment malfunctions, the warranty will cover repairs or replacements. You will also be sure the commercial refrigerator you choose will work in the manner you need.
When you no longer need the equipment, you can try and recover some of your investment by selling it.
Equipment that you buy is generally new, which has advantages itself. New commercial refrigerators are more energy-efficient than used models.
Cons of Buying
If you decide to purchase the equipment, you have to have a large amount of money available upfront. If you do not, you may need to get a line of credit to afford it. Buying on credit can mean high interest rates which can be an issue if you are not working with a substantial amount of capital.
A commercial refrigerator will start showing damage after a while. When you buy, you do not have the option of switching the equipment for newer options as you would with leasing.
You also run the risk of making your business less scalable. It can be more difficult to scale up your equipment when you purchase it because it means having to sell it and buy a new refrigerator.
Weigh Your Options
Buying the commercial refrigerator you need is usually the best option for business owners. When you turn to a provider of hospitality equipment like us at Federal Hospitality Equipment, you can get the quality options you need to boost your business.
At Federal Hospitality Equipment, we understand the importance of having a complete range of commercial kitchen equipment to meet your business needs. In addition to refrigerators, we also offer a wide selection of bain maries and bar fridges Australia offers. Contact us today to explore our comprehensive range of commercial kitchen equipment and find the perfect solutions for your business.
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