Best Vending Machine Financing

Once you install the vending machines, your job isn’t over. It’s your responsibility to keep each vending machine fully stocked and in good working order. You’ll also have to pay the owners of the buildings where you keep your machines rent or commission.

In general, you can expect to owe anywhere between 5% and 20% of your sales. As you can see, owning a vending machine business comes with plenty of expenses. While it can be lucrative and exciting, you will need to find a way to fund it.

When it comes to vending machine financing, there are a variety of options available to you. Since each one is unique, it’s important to consider the following before you sign on the dotted line. While ranking the best vending machine loans in 2022, our experts focused on these factors.

• Loan Features: This refers to loan terms, loan amounts, and repayment schedules. Some lenders offer long terms, large amounts, and flexible repayment schedules while others have shorter terms, smaller amounts, and less repayment flexibility.
• Application process: The application process can be quick and easy with fast approval and funding. Or it may take some time and require extensive documentation. Also, some applications come with a prequalification feature where you can check your loan offers without any impact to your credit.
• Interest rates and fees: Minimum and maximum interest rates and fees vary greatly from lender to lender. In addition, there may be minimal fees or many fees like origination fees, late fees, and prepayment penalties.
• Qualification process: While some lenders require good credit, sufficient annual revenue, and at least a few years in business, others are more lenient and willing to lend to startups and newer businesses.
• Customer support: Customer support is about how easy it is to contact the lender. One lender might offer a live chat and a number of useful tools on their website. Another may only be available via phone during certain business hours.
• Online user reviews: Third-party reviews on sites like TrustPilot and Better Business Bureau (BBB) can speak volumes about lenders’ customer service and their reputation among borrowers.
• Perks and Bonuses: It’s not uncommon for some lenders to go above and offer perks like hardship assistance, mobile apps, and free credit score monitoring. These extras can make a loan product more appealing.

Best Vending Machine Loans - Full Overview

Best Vending Machine Business Loans - Features Comparisons

Use Personal Savings for Vending Machine Financing

If you have sufficient personal savings, you may want to allocate a portion of it to launch or grow your vending machine business. By doing so, you can meet your goals faster because you won’t have to wait for approval and funding from a lender. Also, you can save thousands of dollars on interest.

Of course, you should only use your personal savings to support your venture if your finances are in good shape. Make sure you have a solid emergency fund and don’t tap into your retirement funds as doing so can lead to hefty penalties and derail your retirement plans.

While it’s easy and cost-effective to use your personal savings for your vending machine business, it’s also very risky. If you’re not in a financial position to go this route, it’s better to secure vending machine financing elsewhere.

Vending Machine Supplier Financing

It is possible to lock in financing from vending machine suppliers. Whether you’re a new or existing customer, you may want to ask a vending machine distributor if they offer payment terms directly to their customers. In one meeting with a supplier, you can apply for financing, get approved, sign an agreement, and set up a payment plan. The process is similar to dealer financing when you buy a car.

Since each vending machine distributor will have their own requirements and terms, it’s important to do your research and make sure financing through them makes financial sense. Otherwise, you may pay more than you would if you chose a third-party lender.

Vencoa Vending Machines, a vending machine manufacturer provides financing through USI/Inland Financial Services. You can pay for your vending machines in 30 days after you receive them without incurring any interest charges. Another option is to make three equal payments within three months of delivery.

A & M Vending Machine Sales, a vending machine supplier also offers financing of up to $150,000. The company advertises an easy application process with same-day approvals, competitive rates, and flexible terms.

Other Types of Vending Machine Financing

You may want to consider other types of vending machine financing, including:

• SBA Loans: Partially guaranteed by the U.S. Small Business Administration, SBA loans offer low rates and lengthy repayment terms of up to 25 years. You will, however, need good credit and at least $100,000 in annual revenue to apply for them.
• Microloans: If you need a small loan of up to $50,000, a microloan can meet your needs, especially if you’re new to the vending machine business and have minimal to no credit history. Offered by both nonprofits and for profits, microloans usually come with mentoring and other resources for startups.
• Business Credit Cards: Business credit cards work a lot like personal credit cards. You can use them to cover the day-to-day expenses of your vending machine business, like inventory and marketing. Most business credit cards offer rewards like cash back, airline points, and gift cards.

How Much Does it Cost to Open a Vending Machine Business?

A used machine can cost above $1,200, but a new one will be about 10 times as much.

Some other expenses to consider are as follows:

• Restocking vehicle: If you have the machines in a very crowded area, daily refills should be necessary. Sure, you can rent a car to do the rounds and stock the machines, but buying a vehicle should be a top priority.
• An employee: When you start out you may only have a few machines. You may thus be able to manage driving around and restocking your machines yourself. However, once you expand your business, you'll have to hire a few trustworthy employees.
• Technical maintenance: Vending machines, especially high-tech ones, are prone to technical issues. Periodic maintenance is important and often costly.
• Inventory: You will likely spend a lot of money on inventory. Having vendor agreements will ease you into the business, and you'll be able to arrange periodic deliveries and could even get special prices.
• Permits and taxes: Each city has its own laws regarding vending machines and the permits you need to have. This bureaucratic layer will probably cost you around a few hundred dollars a year, depending on your location and the number of vending machines you have. You should also consider the taxes your business will need to pay.
• Insurance: Vending machines are easy to break - that's why we believe that having insurance on all items is a must. Depending on how many machines you own, this expense might cost you up to a few thousand dollars.

As you can see, a vending machine business may incur many expenses and is only profitable if managed correctly.

How to use vending machine financing?

You can use vending machine financing for a variety of purposes including:

• Vending Machines: To enjoy high profits, you’ll need to buy many vending machines and diversify where you place them.
• Stocking Items: You won’t make any money off your vending machines unless you buy snacks, drinks, toiletries, and other items people will want to buy.
• Restocking Vehicle: While you can rent a vehicle to carry your inventory and restock machines, a restocking vehicle is a long-term investment that can really pay off.
• Employees: At first, you might manage your venture on your own. But as you grow, you may hire others to drive around and restock the machines for you.
• Maintenance and Repairs: Even if you opt for the latest and greatest vending machines, they’ll need to be maintained and repaired eventually.
• Permits: Chances are you’ll be required to cover the cost of permits to adhere to each city’s vending machine laws.
• Insurance: Vending machines are easy to break, making insurance worthwhile.

How to Qualify for a vending machine loan?

Some vending machine loans are easier to qualify for than others. To increase your chances of success, follow these tips.

• Monitor Your Credit Scores: Lenders will look at your credit when they review your application. The higher your credit score, the more likely you are to get approved with low rates and favorable terms. Make sure you know where you stand credit wise before you apply.
• Choose Secured Loans: Since secured loans are tied to collateral or a valuable asset that you own, lenders tend to be more lenient. If your credit isn’t the best, you may want to look for secured options.
• Craft a Thoughtful Business Plan: A business plan outlines who you are, what your goals are, and why you need vending machine financing. Be sure it’s written well as most lenders will ask to see it.
• Compare Lenders: There are countless lenders that offer vending machine loans. If you compare the various solutions at your disposal and only apply for the ones with requirements you meet, you’ll be less likely to be disappointed.

How to Recognize New Vending Machine Business Development Opportunities?

Successful vending machine business owners know that statistics are essential. You should be able to present your vending machine business in numbers. Some questions to consider are:

• Which of my vending machines are performing the best?
• What factors are influencing their top performance?
• How can I replicate the success of these machines in other locations?

In addition, let's say that the machines you have located next to schools perform better than the ones you have placed next to bus stops. It would be logical to dig deeper so that you can replicate the success of your school-based vending machines.

You may also wish to consider:

• Your best-seller product for each location?
• Why is it selling better than others?
• Better selling options for another location?

These and other questions will help you keep track of your inventory and help you recognize new business development opportunities in the future.

Conclusion

The vending machine business brings in billions of dollars every year. To tap into this lucrative market or expand the venture you already have, vending machine financing is ideal. It can provide you with the capital you need to operate efficiently and maximize your profits.

Check out the best vending machine loans our experts have recommended. Our research can steer you toward the right direction, no matter where you are with your operation. Best of luck with your vending machine business!