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How do you finance your machines

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My vending company seems to be moving more into the full line direction. Just got a new account with 2 locations and only 10% commish, best part is we took it from a big company in my area (american). Right now we have 4 full line locations, with 3 brand new AMS Combo machines, and one National combo. The national combo I bought with the location for $500 but the other 3 machines we have bought cash at close to 4000 each, our locations are pretty good sellers but i would like to find some source of financing to get more machines, with both banks and leasing companies wanting a personal gurantee(and therfore credit check) I have not found funding, I have some business credit(dun and bradstreet number) but was wondering were you get your money to finance more machines? Do you wait till you can use profits? Any help would be great




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In this economy I don't know of anyone that is setting up credit without a credit check and it sounds like you are concerned about that. But there are some things to keep in mind with financing.

While credit card financing is easy if you have the credit card and the points look great, the rate is usually very high and can be hard to get out from under unless you are disciplined.

Some manufacturers offer financing that at time is easier to qualify for as they are not only getting your loan but selling a machine as well.

Finance and lease companies are out there but their qualification process can be tough. Remember, machines have legs and can easily disapear leaving the lender nothing.

Your cheapest rate for funding would be with a bank line of credit. Preferably a business line that will grow with you (yes, you will more then likely need a personal guarantee).

What to be careful of.....

Home equity line to fund your business. While the rates are cheap and if you have the equity it is easy to qualify it can be dangerous. In the off chance that you totally bomb out on the business do you really want to have your house at stake as well?

Credit cards and minimum payments: If you do this, don't ever figure out what you really paid for the machine because you won't believe it.

Deferred payments: If you are disciplined enough you can make this work. Unfortunately, I have seen more then one company get in over their head with deferred payments.

A lot will depend on the structure of your business (sole prop, s corp, c corp, llc) and the importance of a business credit line. Borrow a small amount of money, pay it back quick( ie: borrow $1000.00, put it in the bank and pay it off on your first payment. This shows up as a PAID LOAN that is good for your credit.

When building a business cash flow is important and you need to at ways of not spending all your cash flow in growth. Remember though, when you order something on terms you have spent that money and make sure you have it to pay. Don't rob Peter to pay Paul. While an accrual type accounting can seem off to some compared to a cash basis, it really can show you where you money is down the road, where cash shows you your money now.

Anyone can grow quickly giving away the store, grow smart. It used to be said that a company that grows slowly will shrink slowly. A company that grows quickly will crash quickly. This means that the fast growth up and comers will never last so keep your sights fixed on "your" goals not others. Learn from the dot com companies that proved this saying.

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A Crane salesman told me that manufacturers are still offering lines of credit; although, They are more conservative now compared to the past. From what I remember, The companies were National, Dixie narco, GPL, and I believe AMS.  Just type in Crane National on a search engine and you will be lead to their website.

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I have credit margin on my rental properties that I use to my vending machines. The interest rate is under 6%/year.

The people I deal with all want cash for their mnachines and don't offer any financing nor partial payments...

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