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Financing and Leasing For The Vending Machine Business

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Published: 16Nov2009
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A few coin-operated machine manufacturers either provide their own lease program or their licensed coin operated machine dealers provide this service.There are more than a few companies that finance/lease vending equipment. I am not going to name any specific leasing or finance company, simply because I do not want to influence you in these matters. But I can tell you to ask each vending machine distributor and manufacturer if they have an in-house plan that they offer to their qualified buyers. It also would be a good idea to ask if they can provide a list of qualified independent companies that provide lease/finance plans for coin operated vending machines.

If you do some research, you will find that even if your monthly-payments are a little more costly when leasing, the tax laws permit you to write off and depreciate more than when you finance. Better payment terms are usually available. Many coin-operated vending-machine leasing companies will set up the payments to suit your precise circumstances buy creating a balloon payment at the end of the agreement. You will also be faced with a buyout when leasing. The most calmon buyout attached to vending machine leases is the $1-buyout.This is called a closed-end lease. Open-end lease are not as desirable when buying this type of equipment.

If you lease or finance vending-machines, you're going to be charged 7-9% interest, slightly higher than when you finance them. At the end you will own the vending machine with no sizable additional payout; this also will apply when leasing route trucks.

Your bank for the most part is not interested in coin operated-vending equipment financing or leasing. One of the reasons for this is, your bank doesn't have a buyer for the coin operated vending equipment if you default. Use a source that specializes in this type of vending machine business equipment; they already are experianced with the risk associated with the industry and have a source for coin operated vending equipment they may have to take back.

More cost effective interest can be achieved via a secured loan. Lots of our vending management company's 3rd party vendors use equity loans on real estate they own or acquire financing through credit unions.

It is important to keep in mind that even with less than desirable credit, most lease and finance companies will rethink approving your request if you make a larger down-payment. Some companies may ask for as much as 25-50% down in the beginning. It is also important to know that after a period of on-time payment history these companies will relax their requirements.

Reference Terms From: Truth in Vending

Jimmy Ingram has written 20-books on his business experiences and solutions over the last three decades of being a serial entrepreneur; you can purchase Jimmy's books at e-Business Media Online and download several of his books free at http://www.vendingforprofit.net

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