Used Equipment Financing for Michigan Restaurants

Who we usually see

In Michigan, used equipment deals usually show up when an owner in Detroit, Grand Rapids, Lansing, or Traverse City is trying to open before winter traffic shifts, replace a failed walk-in after a cold snap, or stretch a remodel budget in an older brick building that needs more hood, gas, and electrical work than the original plan allowed. We work with single-store operators, small regional groups, bar-and-grill owners, pizza shops, diners, brewpubs, and franchisees who already know the room will sell once the line is running, but do not want every dollar tied up in a fryer package or a refrigerated prep line. The typical ticket is often in the tens of thousands, not the millions; the used gear may be a walk-in box, a combi, a dish machine, a reach-in, a bar package, or a full hood set pulled from a closure in another Michigan market or a neighboring state.

What Michigan changes

Michigan is not a generic permit environment. Lake-effect snow, freezing road conditions, and the freeze-thaw cycle can slow deliveries, crack old slab work, and expose problems in basements and rear additions that looked fine in July. In Detroit, Flint, and other older urban corridors, we see more second-generation spaces where the buildout has to reconcile existing utility runs with current fire suppression, grease trap, and ventilation requirements. In Grand Rapids, Ann Arbor, and Lansing, local health department review can affect how fast a used prep line gets signed off, and in the Upper Peninsula the practical issue is often logistics: freight timing, service access, and whether the installer can actually get there before the next storm. The right financing has to account for that reality, because a bargain used hood is not a bargain if the cash plan forgets freight, rigging, permits, and the extra trade work that Michigan buildings always seem to demand.

How we structure the money

Our financial services and lending solutions for restaurant owners and operators usually come down to three structures. A term loan is the cleanest when the used equipment is staying in the kitchen for years and the operator wants ownership from day one. A lease can make sense when the monthly payment matters more than the balance-sheet treatment, especially for equipment that will get replaced before the end of the next Michigan winter cycle. A line of credit is useful when the purchase is only one piece of the project and the owner needs flexibility for deposits, freight, install overruns, or the last round of plumbing and electrical fixes that show up once the hood is opened up. For SBA-backed equipment purchases, the max loan amount is $5 million, equipment terms can run up to 7 years, and the guarantee can cover up to 85% of the loan, which is helpful when a dealer invoice, a used walk-in, and a full installation package all have to close at the same time. In practice, Michigan operators use the money for the machine itself, but also for freight into the state, rigging in tight downtown Detroit or Grand Rapids sites, hood tie-ins, fire suppression, and the little pieces that turn a used asset into a code-compliant opening. If the deal uses SBA 7(a), the current rate range is 8-11% APR and the guarantee fee usually lands in the 1-3% range, so we model the payment against real restaurant cash flow, not a spreadsheet fantasy. Equipment owned through financing can also qualify for the 2026 Section 179 deduction, which is capped at $1,220,000, so tax timing can matter as much as monthly cash flow for a Michigan buyer planning around year-end.

What lenders want to see

The cleaner Michigan file is the faster it moves. For SBA-style equipment financing, lenders generally want at least 24 months in business, a 640+ FICO score, and a debt service coverage ratio around 1.25x, though strong cash flow or collateral can help when the numbers are close. The process itself often takes 30-45 days once the file is complete, which is why we ask owners in Michigan to pull together the package before the used equipment is fully reserved. That package usually includes the last three years of business tax returns, year-to-date profit and loss, a current balance sheet, bank statements, a debt schedule, the equipment quote or purchase agreement, entity documents, a personal financial statement, and any Michigan licenses or local approvals tied to the site. If the project is in a city with a heavier review process, we also want the permit set, the fire suppression sign-off path, and the landlord documents if the space sits in a leased strip center or an older downtown building. When the paperwork is tight, we can focus on the real job: getting a working kitchen open in Michigan without starving the operating account.