With Covid-19 placing extra pressure on the capital resources of operators, flexible financing arrangements from refrigeration manufacturers are helping customers get their hands on high-ticket equipment without breaking the bank…
One of the big challenges facing foodservice operators right now is how to get hold of vital new equipment at a time when budgets remain under pressure and purchasing decisions may be on hold.
This is especially a problem when it comes to replacement items that are urgently needed to keep a foodservice operation up and running.
Refrigeration is one area of the kitchen where there really is no alternative but to source new equipment when the need suddenly arises. Fortunately, manufacturers in this sector are coming up with financial solutions that enable operators to instantly obtain fridges and freezers without having to find all the money up front.
Foster Refrigerator and its sister company Gamko offer an interest-free credit option in the UK. The 12-month package it provided before lockdown has now been doubled to 24 months, or 18 months if a customer prefers. What’s more, they’ll own the product after the final payment.
We’re expecting interest-free credit to grow in popularity over the next 12 months”
“Cash flow is king right now, and that’s why we’ve decided to do our bit by pulling together a package for our dealers that is effectively putting our money where our mouth is at a time when the industry is being hit hardest,” explains Ewen Cairns, UK sales manager at Foster and Gamko.
“Pubs, bars and restaurants have been shut for months, and because of that, those reopening now may find that their kitchen equipment wasn’t decommissioned properly at the start of the lockdown.”
A far as Foster is concerned, the package, which is mirrored by its ITW counterparts Hobart and Avery Berkel, provides a real and meaningful form of support for both its distributor network and end-user customers. “Our offer gives people the opportunity to own market-leading products, without that initial outlay,” says Cairns.
Adande launched its ‘EasyBuy’ leasing scheme back in the summer, partnering with PMD finance due to its commitment to helping customers find the right finance plan to suit their individual circumstances.
“This was important to us, because when times are hard you save money where you can, but sometimes, and we’ve seen it with refrigeration, this can be a very false economy,” explains Adande executive chairman and CEO, Nigel Bell.
“We wanted to give our customers a way to continue buying quality equipment, investing well without adding financial strain. Adande has a low-ownership cost throughout its lifetime thanks to its long lifespan, as well as its low-energy usage. We did not want customers to miss out on those benefits and forced into buying ultimately unreliable refrigeration that costs the earth to run.
“It’s very important to us to give tangible support to our industry and EasyBuy, along with offering a five-year UK warranty and a company price-freeze until next summer, have been some of the practical steps we have taken to do that.”
Now more so than ever, it’s important that catering equipment manufacturers step up and look at ways that they can further support their customers, not just from a product point of view but from a financial perspective”
Elsewhere, Hoshizaki’s new leasing scheme is also aimed at operators that are looking to reap the practical benefits of quality refrigeration equipment while improving their cash flow and progressing their business. Payment plans start from as little as £50 per month on contracts of between three and five years.
UK and Ireland director, Simon Frost, expects the flexibility of such financial packages to really benefit independent businesses and small groups, where budgets and the availability of cash tend to be tighter than chain operators.
“The financial effect that the Covid-19 pandemic has had on many hospitality businesses has been draining to say the least. It was for this very reason that Hoshizaki UK felt that now was the right time to initiate a leasing scheme,” he says.
“We hope that this flexible new route for financing Hoshizaki equipment will help UK foodservice business to recover from the recent economic woe, while improving efficiencies in the kitchen and behind the bar.”
Another refrigeration brand that espouses the benefits of the leasing model is Williams Refrigeration. It has a partnership with Academy Leasing through which it offers competitive funding solutions and bespoke financial packages suitable for a range of budgets. This includes the option of a three-month period of discounted payments to help lower initial outlay, a mechanism designed to give businesses a leg-up as they come out of lockdown.
Sales and marketing director, Malcolm Harling, says it’s important to be able to offer customers access to finance packages that are suitable for a range of budgets and allow the cost of investment to be spread over a defined period.
“As a consequence of the Covid-19 pandemic, our existing financing programmes were adapted to allow customers greater flexibility to spread payments and reduce costs, to help to ease them back into operating after the lockdown,” he adds.
“Refrigerators and freezers are vital equipment in any commercial kitchen but the importance of using the best and most efficient models has increased by orders of magnitude with the changes required to combat Covid-19.”
Given the hardship that restaurant operators are continuing to encounter, it is only natural that those in need of new equipment may consider it more sensible to purchase lower-priced items, even if it is a deviation from existing buying strategies.
That’s where flexible financial programmes come into their own as they mean customers can still buy the best quality equipment knowing that the investment can be spread at no extra cost, argues Foster’s Cairns.
“It’s been reassuring to see that the appetite for top-quality refrigeration is still very much out there as kitchens are putting even more importance on the reliability of a product and the total cost of ownership,” he says.
Adande’s Nigel Bell thinks financing programmes and initiatives will be vital for supporting new refrigeration equipment sales over the next 12 months.
“Leasing and also rental are easy ways to keep payments small and manageable as revenues begin to recover,” he argues. “Chefs still want high-quality equipment that will last and that is flexible in its functionality. Adande’s fridge to freezer mode, for example, allows a chef to adapt to different levels of demand and menu change, which is hugely important – especially as we continue to battle with Covid-19, and the restrictions that we currently have to abide by.
“As indicated already by the FEA, the government also needs to support the hospitality industry with mechanisms that encourage the purchase of sustainable equipment at this difficult time,” adds Bell.
Hoshizaki’s Simon Frost thinks the ability to provide financing options to customers is a valuable string to suppliers’ bows in the current climate.
“Now more so than ever, it’s important that catering equipment manufacturers step up and look at ways that they can further support their customers, not just from a product point of view but from a financial perspective,” he says.
“Through this, refrigeration manufacturers will broaden their customer reach, satisfy a wider network of operators and, of course, make new refrigeration products more accessible to operators, particularly those that may not be in the financial position to pay for a brand new unit in one go.”
Williams’ Malcolm Harling agrees. He says the majority of hospitality businesses have suffered significantly reduced levels of income during 2020, but leasing and spreading payments helps to make purchasing the latest, most effective and energy efficient equipment a viable option.
“The lease can be used on all types of equipment, from undercounter cabinets to specialist equipment such as blast chillers and bespoke coldrooms. A single lease can be used to buy multiple products — and it could also cover cooking equipment and other appliances. Plus it can cater for all budgets, from low to high.”
So what does the future hold for equipment financing? Will it become more prevalent across the market?
“We’re expecting interest-free credit to grow in popularity over the next 12 months,” states Cairns at Foster. “Such financial support is commonplace on the high street when buying cars and household items such as sofas, and therefore it’s no surprise to see the demand we’ve been getting since launch.”
Williams’ Harling says that the company intends to continue to closely monitor the market and further adapt to the changing needs of its customers where needed.
“Flexible financial options will continue to be developed, with a focus on those that can adapt to changing customer needs to help them cope with the challenges of the pandemic.”