How much does a Used Restaurant Equipment Dealer cost to buy?

A typical Used Restaurant Equipment Dealer sells for 1.5x to 2.5x seller's discretionary earnings. With estimated SDE of $263K, expect to pay roughly $394K to $656K before adjustments for assets, debt, growth, and local market quality.

How much does it cost to start a Used Restaurant Equipment Dealer?

Startup costs range from $60K to $250K depending on location, equipment, and scale.

Physical

Used Restaurant Equipment Dealer

Restaurants fail at 60% in Year 1 — generating a never-ending flood of commercial-grade equipment at 10 cents on the dollar

Bottom line

Worth studying, but do not buy without strong local proof.

Used restaurant equipment dealers buy commercial kitchen equipment at bankruptcy liquidations, restaurant closures, and estate sales — typically at 5–15% of new retail cost — and resell to new restaurant owners and caterers at 40–65% of retail. The supply chain is grim but reliable: ~60% of restaurants close in their first year, releasing $50K–$500K in commercial equipment per closure. A Hobart commercial mixer that retails for $6,000 new goes for $300–600 at liquidation and resells for $1,500–$2,000 at the dealership. A 5,000 sq ft warehouse with rolling inventory turns 3–5x annually at 35%+ margins.

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Acquisition score

Margin · multiple · SBA data

74Excellent

Avg revenue

$750K/yr

$280K–$2M range

Profit margin

35%

~$263K SDE

Multiple

1.5–2.5×

of SDE

Est. buy price

$394K–$656K

startup: $60K–$250K

How It Works

Dealers source equipment from restaurant liquidators, public auctions (PAR, Heritage Global), bankruptcy trustees, and direct owner outreach. Equipment is cleaned, lightly refurbished, tested, and listed online (eBay, Craigslist, RestaurantEquipment.com) and in the showroom. High-velocity SKUs include fryers, mixers, slicers, refrigeration, and hood systems. Delivery and installation services add 10–20% revenue per sale. Dealers who do refrigeration service in-house capture the highest-margin work.

BizBite verdict

Watch / verify

Used Restaurant Equipment Dealer has enough high-level data for a first look, but BizBite has not assigned a category-specific operating model yet. Treat the score as preliminary.

74Excellent

low data confidence · 40/100medium financing fit

Why it may work

+Attractive 35% estimated margin profile

Be careful

!Source link status has not been verified yet
!No last-checked date yet
!No SBA category enrichment yet
!No category operating model yet
!Low data confidence

Deal Calculator

Priced off $263K SDE — can this deal service its own debt?

3.43×

DSCR · Lender-comfortable

Purchase multiple — 2.0× SDE ($525K)

Category range: 1.5×–2.5× SDE

Down payment — 10% ($53K)

SBA minimum equity injection is 10% for change-of-ownership

Interest rate — 10.50%

Typical SBA 7(a) range: 9.5–12% (prime-based)

Loan term — 10 years

Standard SBA 7(a): 10 years for business acquisition

Purchase price

$525K

2.0× of $263K SDE

Cash to close

$68K

$53K down + ~3% closing

Debt service

$6K/mo

$77K/yr on $473K loan

Cash-on-cash

273%

cash back in ~5 mo

Debt service coverage · what the lender sees

3.43×+$15K/mo after debt

Most SBA lenders want ≥1.25× coverage; 1.5×+ is a strong file.

SDE = revenue × margin estimate for this niche; it includes owner compensation, so budget your salary out of cash flow. Excludes working-capital injection, capex reserves, and taxes. Actual SBA terms vary by lender and borrower.

Pros

+Captive, counter-cyclical supply — more restaurant closures in recessions = more cheap equipment to buy
+35–45% gross margins with low per-unit acquisition cost
+Online reach extends the buyer pool nationally for high-value equipment
+Add-on services (cleaning, refurb, delivery, installation) compound revenue per transaction
+Low competition: most equipment dealers are local, owner-operated, and not easily scalable by outsiders

Cons

-Inventory-heavy: $80K–$250K in floor stock required for serious volume
-Storage and handling require a warehouse with loading dock and lift equipment
-Refrigeration equipment requires certified techs for legally compliant servicing
-Inventory can sit — slow-moving specialty equipment ties up capital

Best For

Operators with warehouse access, basic mechanical ability, and comfort buying at liquidation auctions

Operating Costs

Primary costs: warehouse rent ($3K–$8K/month), forklift/pallet jack, delivery vehicle, cleaning/refurb labor, website hosting, and insurance. Owner-operators who do their own sourcing and selling keep net margins above 30%.