This article explains soft costs in equipment financing for Terre Haute and Vigo County restaurants: delivery, rigging, installation, utility hookups, ventilation work, training and software, why partners treat them differently from hardware, and how to plan for them. Brookmont Funding, a small-business funding broker in Terre Haute, Indiana, provides it as general information; lending partners decide what they will fund.
Hard costs and soft costs
In equipment financing, the hard cost is the equipment itself: the range, the fryer, the cooler box and its compressor. It has a serial number, it can be inspected, and it can be resold if the financing goes wrong. Soft costs are everything else it takes to make the equipment usable: services, labor and intangibles with no resale value of their own.
Typical soft costs in a restaurant kitchen
- Freight and delivery
- Rigging, especially for heavy or oversized pieces
- Removal and disposal of the old equipment
- Installation labor
- Electrical, gas and plumbing hookups
- Hood, ventilation and fire suppression work tied to new cooking equipment
- Staff training from the vendor
- Software setup and subscriptions for POS and kitchen display systems
- Extended service plans
Why partners treat them differently
A partner financing equipment relies on the equipment as collateral. If a restaurant closes, the partner can recover and sell a combi oven; it cannot recover the hours an electrician spent wiring it or the training session the cooks attended. So partners commonly limit how much of a project can be soft costs, fund them only alongside the hardware, or leave them out entirely. Policies differ widely, which is why the split matters before you compare offers.
Ask each partner directly: what share of soft costs will you include, which items count, and does including them change the term or the collateral?
Restaurants in Vigo County, Indiana
Vigo County had 195 restaurants and other eating places with employees in 2023, within 248 food service and drinking place employers, and they employed 4,820 people (U.S. Census Bureau, County Business Patterns 2023). Only 19.0 percent of those restaurants had fewer than five employees, against 46.3 percent of all employers in the county, so a typical local restaurant is a fairly large operation with a serious kitchen to equip and maintain. More detail is on our restaurant financing page.
Walk-in coolers: a worked list
Walk-in cooler financing is a good example of how far soft costs can reach. Beyond the panels, door and refrigeration system, a project can involve delivery, assembly on site, a pad or floor work, electrical service for the compressor, a condensing unit location outside, and removal of the old box. Only some of those items are equipment.
Ask the vendor for a quote that lists each item separately, marked as equipment or service. That one document answers most of a partner's questions.
Permits and inspections
New cooking lines, hoods and walk-ins can involve building work that needs permits and inspections before the kitchen can use them. Build that time into the plan, and keep copies with the financing paperwork.
The paperwork side is covered in our contractor and permit checklist.
Questions to put to the vendor
- Which items on the quote are equipment and which are services?
- Is delivery to the kitchen included, or only to the curb?
- Who handles the electrical, gas and plumbing connections?
- Does the price include removing the old equipment?
- How many hours of training are included, and for how many staff?
- Which software charges are one-time and which are recurring?
Three ways to cover soft costs
- Inside the equipment financing, where a partner will include them, usually up to a limit.
- From cash, keeping the financed amount to the hardware alone.
- With a separate structure, such as a term loan when the soft costs are really part of a wider remodel.
Whichever route you take, compare total cost across the whole project, not only the monthly payment on the equipment. Our equipment financing page explains loans, leases and EFAs, and more articles are on the blog.
By Brookmont Funding ยท Updated