Vending Machine Financing: Best Business Loan Options
If you have plans to launch or grow a vending machine business, you need many vending machines to succeed. Vending machine financing can help you cover the costs of the machines, as well as any other expenses you may face.
Reviewed by: Sarah Brooks, Personal and Business Finance Writer and Editor
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Costs that come with operating a vending machine business include purchasing and installing the vending machines, keeping them stocked and in full working order, and paying rent or fees to the owners of the buildings where you keep your machines. In general, you can expect to owe anywhere between 5% and 20% of your vending machine profits to building owners.
While a vending machine business can be lucrative and exciting, you will need to find a way to fund it. Vending machine loans can help you get your business started or help cover gaps in revenue and other expenses that arise in this particular small business niche.
Top Picks for Best Vending Machine Financing
Kabbage: Best for Decent Monthly Revenue Requirement
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 terms, rates and fees of each lender. Our experts ranked the best business loans for vending machines with a focus on the potential downsides, advantages and what makes each lender a good option.
Vending Machine Financing: Full Overview of The Best Options
1. Kabbage: Best for Decent Monthly Revenue Requirement
Kabbage Funding offers business lines of credit ranging from $2,000 to $250,000. They are one of the only lenders with a decent monthly revenue requirement, making them a good candidate for vending machine small businesses. Most lenders want to see a monthly revenue of at least $10,000, but Kabbage requires just $3,000 per month in revenue.
Kabbage, backed by American Express, has just one small business product: a line of credit from $2,000 to $250,000. Terms are six, 12 or 18 months and payments are made monthly. Fees with a Kabbage line of credit are 2-9% for six-month loans, 7.5-18% for 12-month loans, and 15.75-27% for 18-month loans. To qualify, you’ll need to have been in business for at least 12 months, have $3,000 per month in revenue, and have a credit score of 640 or higher.
The Bottom Line
Kabbage is a great option for vending machine businesses who don’t have high monthly revenues quite yet. A line of credit from Kabbage can help you purchase new machines, pay for additional vending machine spots, or cover any additional expenses that may arise.
2. National Funding - Best For Loans with Fast Funding
National Funding offers short-term working capital loans you can get within 24 hours of approval. Depending on your credit and other factors, you may borrow up to $250,000 to cover the costs of payroll, inventory, taxes, and anything else your vending machine business needs to run smoothly. National Funding also offers an early repayment discount to borrowers who pay off their loan early.
National Funding’s short-term working capital business loans range from $5,000 to $500,000 with repayment terms between four months and two years. The pay rate starts at 1.10. To be considered, you’ll need a minimum credit score of 600, a business track record of at least six months, and $250,000 or more in annual revenue.
The Bottom Line
National Funding might make sense if you’re an established vending machine business and need some cash to pay for day-to-day expenses. This is particularly true if you’re confident you can repay your loan within 100 days and lock in an early repayment discount.
Fundbox is an alternative lender that uses artificial intelligence. Its lines of credit and term loans start at just $1,000, making them a good fit if you prefer a smaller loan for your vending machine business. Fundbox’s loan application process is quick and easy, and funds are available as soon as the next business day from loan approval.
Fundbox term loans and lines of credit range from $1,000 to $150,000. For lines of credit, rates start at just 4.66% for 12-week terms. For term loans, rates start at 8.33% for 24-week terms. In order to qualify, you must have a credit score of at least 600, minimum annual revenue of $100,000, and a track record of six months in business or more.
The Bottom Line
Typically, starting a vending machine business isn’t going to cost hundreds of thousands of dollars. If you’re in need of just a small amount of money and can pay it back quickly, Fundbox is worth looking into.
4. Bluevine: Best for Vending Machine Lines of Credit
Bluevine is a financial technology company offering business lines of credit to small businesses up to $250,000. With a line of credit, you can withdraw money any time up to your set credit limit. Once you pay it back, you can use it again, and you only pay interest on the amounts you use. If you’re unsure of exactly how much funding you need for your vending machine business or want to prevent cash flow issues, it can be a good option.
Lines of credit from Bluevine range from $5,000 to $250,000 with rates starting at just 4.8%. Terms are between six and 12 months, and payments are made weekly or monthly. Bluevine eligibility criteria includes a minimum credit score of 625, at least $120,000 in annual revenue, and a business history of six months or more.
The Bottom Line
A Bluevine line of credit is a solid pick if you’re on the lookout for flexible vending machine financing. This is especially true if you have good credit and can qualify for a low interest rate.
5. Biz2Credit: Best for Term Loans for Vending Machines
Biz2Credit is not a direct lender, but they will connect you to a lender that will match specifically what you are looking for. We recommend a term loan from Biz2Credit, as they come with minimal restrictions associated with your vending machine business. The entire process, from application to funding, can take as little as 72 hours. Applying will not affect your credit score.
Biz2Credit’s term loans range from $25,000 to $500,000 with repayment terms between 12 and 36 months. Rates start at 7.99% and you’ll need a minimum credit score of 660, at least $250,000 in annual revenue, and 18 months in business.
The Bottom Line
If you have good credit, high revenue, and have been in business for a while, Biz2Credit’s term loans may be ideal. You may get approved for up to $500,000 in funding and take a few years to pay it back.
6. Fora Financial: Best for Vending Machine Financing With Bad Credit
Fora Financial is a fintech lender offering loans to all types of borrowers, including those with bad credit. As the owner of a vending machine business, you can benefit from its short-term loans that go up $750,000 in funding. You don’t need collateral and Fora Financial offers discounts to those that pay their loan off early.
To qualify for a Fora Financial short-term loan for your vending machine business, you’ll need a credit score of at least 500, $12,000 minimum in monthly earnings, and six months of business under your belt. Loan amounts range from $5,000 to $750,000 with terms between four and 15 months.
The Bottom Line
If you’re in need of fast capital so you can start or expand your vending machine business, Fora Financial is a great option. Even though you may have to pay fees, it will be difficult to find these high loan amounts and lenient qualifications elsewhere.
Credibly is a Michigan-based online lender that provides working capital loans, business lines of credit, long-term loans, and SBA loans. Working capital loans up to $400,000 can help you cover the day-to-day expenses of your vending machine business, such as inventory and maintenance. The application takes just a few minutes and you can be funded on the same day you’re approved.
To qualify for a working capital loan, Credibly requires you to have a minimum credit score of 500, $180,000 in annual revenue, and a business history of at least six months. The factor rate starts at 1.09 and you can secure up to $400,000 in funding with repayment terms between six and 18 months. Compared to other lenders, these requirements are lenient, making Credibly our top choice for bad credit vending machine loans.
The Bottom Line
For a large working capital loan with generous repayment terms, Credibly is a solid choice. You can apply online and get approved quickly, even if you have bad credit.
Loan Features: We looked at loan terms, loan amounts, and repayment schedules.
Application process: Ideally, we want the application process to be quick and easy with fast approval and funding.
Interest rates and fees: Minimum and maximum interest rates and fees vary greatly from lender to lender. In addition, there may be origination fees, late fees, and prepayment penalties. This was a top priority when ranking loans for vending machines.
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: We looked at customer support options, including hours, availability, and methods of contact.
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 offer perks such as hardship assistance, mobile apps, and free credit score monitoring. These extras can make a loan product more appealing.
Lines of credit: Start at 4.66% Term loans: Start at 8.33%
$5,000 - $500,000
Factor rate between 1.1 to 1.3
Up to $500,000
Starting from 7.99%
How Much Does it Cost to Open a Vending Machine Business?
A used machine typically will cost you between $1,000 and $3,000, and a new one can be well over $10,000. If you’re planning on owning more than one, these initial costs can add up.
Other vending machine expenses include:
Restocking vehicle: You’ll need access to a vehicle in order to restock your vending machines. In high-traffic areas, you may need to restock daily. Having a reliable form of transportation should be a top priority.
Employees: At first you may be able to handle the vending machine business on your own; but as you grow and expand, you may need to hire additional employees to help with keeping the machines fully stocked.
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 good amount of money on inventory. Having vendor agreements will ease you into the business, and you'll be able to arrange periodic deliveries and possibly receive discounts.
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 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 each year.
Bottom line: starting a vending machine business could cost you as little as a few thousand dollars up to tens of thousands of dollars, depending on how many vending machines you have, whether or not you hire employees right away, what type of vehicle you purchase, and more. A vending machine loan can help cover these expenses while you focus on getting your business up and running.
How to Qualify for a Vending Machine Loan
To qualify for a vending machine loan, you’ll want to have a credit score above 500, be in business for at least six months, and have an annual revenue of $100,000 or more, on average. To increase your chances of approval and land better rates, we recommend the following tips:
Monitor 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. Here’s how you can build your business credit.
Cultivate lender relationships: Ideally, you’d connect to lenders that pique your interest months before you pursue their loans. Personal relationships can go a long way, especially if your credit is shaky.
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. Equipment financing is a type of secured loan that uses your vending machine as collateral.
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 increase your chances of approval.
Other Types of Vending Machine Financing
You may want to consider other types of vending machine financing, including:
SBA loans: Backed 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 qualify.
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 are similar to personal credit cards. You can use them to cover the day-to-day expenses of your vending machine business, such as inventory and marketing. Most business credit cards offer rewards like cash back, airline points, and gift cards.
Personal savings account: Start-up costs for a vending machine business to tend to fall on the low side compared to other small businesses. If you can swing it, using your personal savings account to get the business up and running is something worth considering.
Vending machine supplier financing: Vending machine distributors oftentimes offer payment plans and financing options directly to customers. It’s worth looking into this option and comparing rates and fees to other lenders to ensure you get the best deal.
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. Or, you can decide to specialize in one location only.
Pros and Cons of Running a Vending Machine Business
There are pros and cons to any type of small business. Let’s take a look at the pros and cons of running a vending machine business.
Low startup costs: A vending machine business can cost as little as just a few thousand to get started.
Minimal inventory required: You won’t need office space, warehouses, or extensive inventory to get going. You simply need a vending machine and items to stock it.
Low risk: If you end up not wanting to run the business for more than a few months, you can simply sell the vending machine(s) you purchased and move on.
Flexible schedule: You can stock the vending machine at any time and on any day of the week, allowing flexibility in your schedule to work another job or run another small business.
Low profit margins: You won’t become a millionaire operating vending machines, but you can definitely generate a few hundred a month in profit per machine.
Not completely hands-off: Vending machines are not a “set it and forget it” type of business. You’ll need to monitor which locations do the best, which products sell the most, and how often you need to restock your machines.
Difficulty securing prime locations: Your biggest challenge may be finding the best location for your machine, as many areas are already saturated.
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.