If you are thinking of getting into the vending machine business, you should keep in mind that while it may not be the most glamorous thing ever, it can bring you a lot of money. This obviously applies to successful vending machine businesses that can, in the long run, prove to be a clever way of climbing up the entrepreneurial ladder.
However, a vending machine business owner needs to consider the fact that this type of activity bases its revenue on multiple clients that pay small amounts of money. In order to be on the right track, you need a considerable number of vending machines. And, to get them, you will need quite a large amount of funding. Thankfully, there are ways in which you can access financing for this kind of business with vending machine business loans being one of them. In this article, we will be detailing the most important vending machine business finance options and how you can access them.
How much do you actually need to start on the right foot?
As we have already said, in order to start a vending machine business on the right foot, you need a considerable amount of money. You will need those funds to buy the machines and to pay for their maintenance, for starters. You might need to acquire up to ten new vending machines and a few refurbished ones for snacks and sodas.
Last but not least, you will need money to buy the products that will fill your machines and to make sure that they are always in good shape.
Taking this into consideration, you might need up to $2,500 just for those initial investments. Of course, nobody restricts you when it comes to how much money you should invest. So, if you have more, you can obviously buy more machines because this will bring you more profit too. This is not a rule but it’s definitely a step in the right direction.
What can your main finance options be?
Probably the first finance idea concerning your vending machine business is to get the necessary money from your personal savings. If you are able to do this and still have at least six months of living expenses covered, then you are definitely on the right track. Keep in mind that you are going to sacrifice your savings on a completely new business that might not work. Once you have accepted that risk and put away some funds to resort to in case things go badly, you are free to start your vending machine business.
Another way in which you can get some money to start your business is to sell some personal items that you no longer use. You can do that online or at garage sales and obtain some extra cash to add to your savings in case they are not enough for your business. However, don’t simply sell useless stuff and expect people to pay a high price on those items. Put up for sale only those things that still work and which other people might actually use.
It’s no secret that obtaining an advantageous small business loan from a financial institution, like a bank or a union, has become increasingly more difficult over the last few years. However, in case you don’t have the necessary funds to start a vending machine business, you can resort to an online lender.
Recently, there have been more and more such firms that offer small business loans quickly and easily. Some of them even accept you with a relatively bad credit score. The application procedure for those firms is done online and is super simple. You just need to fill out a form with your personal and business details and wait for the approval. Once a credit check is done, you will receive the funds in your bank account in as little as 24 hours, in most cases.
The good thing about online lenders is that there are usually no other costs or fees that you need to pay. Also, the repayment terms vary as well as the interest, depending on multiple factors. The payments are usually withdrawn from your account by the firm when the time comes, without you having to worry about paying. Most online lenders for small business loans don’t have strict eligibility requirements but you still need to check them all if you want to get the money.
Help from other people
Asking for financial help for your vending machine business from friends or relatives can also be a good solution. Whether you need the full starting amount or just a bit more extra money to add to your savings, people who care about you can be your allies. In fact, you can even turn a good friend or relative into your business partner and work through these initial expenses together.
However, take into account the fact that having a business partner will most likely take away from the control that you will have over the company. This is a compromise that you need to fully accept if you want to ask a friend for help. So, you should be ready to not take decisions on your own and to collaborate with your business partner because they helped you with money when you were just starting your business.
Startup funding from suppliers
There are also instances when certain vending machine distributors can offer funding to their new clients. This type of funding also comes with payment terms and, in a way, it’s just like an automotive dealership financing. To do that, you will simply need to meet up with the vending machine distributor, agree on all the terms, establish a payment plan, and sign all the papers.
However, before getting involved in such a thing, make sure that you know the correct prices of the vending machines. This way, you will notice if you will get charged more or if anything seems sketchy.