VendingArticles.Net

Sometimes the biggest barrier to entering the vending business is securing startup money. This article will give you ideas on where to find funding sources (even some SELF-funding sources!)

Standard Bank Financing

This is probably the most difficult, yet not impossible with good credit and some net worth.  Banks typically do not look favorably at vending machine loans and consider them risky because they are not considered a "fixed asset".

Small Business Administration Loan.

Banks administer this loan and are more favorable to this type than a standard bank loan because they are only liable for 15% of what they loan (the government carries the other 85%).  There are a number of types of documentation required with this loan, but it is certainly worth the trouble if you are willing to follow the process.

Home Equity Loan.

When thinking of financing a home business or business startup, many people traditionally think of getting a standard business loan. While this may be appropriate, do not fail to consider using your home as a bank. See my article "Using your Home as a Bank" for more on Home Equity Loans.

Family Loan

In some cases, a family member may be favorable to loaning you the money for starting your home-based business.  While there may be relationship risks to this setup, it needs to be considered as an alternative to standard business financing.  Some family members would rather invest in your business vision and draw a little interest rather than lending it to a bank at 2-3%.

Invest your tax return money

For many people, April 15th is bonus time every year as they receive tax returns with earned income credit and deductions for kids.  Why not use this to slowly build your vending business? It's a great, safer way to build your business.

Sell items you don't need.

Yes, this is probably the least popular, but how bad do you need to create an income stream?  What about downsizing your car and investing the money in machines?  Why not have  a huge yard sale to raise $500-$1000?  What about downsizing your home and investing your profits in the business?  All of us have some money around us in our life that we could put to work.

Lease Purchasing.

An option to getting into the vending business is to make an offer to buy an established vending route by lease-purchasing.  You agree to lease the route from the seller with an option to buy at the end of the lease period.  You invest your profits from the lease period into the purchase of the business or you can continue leasing for the cash flow you are receiving.  Remember to get legal help in setting up any contractual agreement like this.

Owner Financing.

While not always easy to find, don't let it stop you from asking the seller of a vending route for it, especially if you have some money to put down.

With any decision to borrow, you need to get a professional evaluation from an accountant, investment advisor, etc.  Borrowing is a two-edged sword:  it can cut for the good and for the bad. 

(C) Christmark Enterprises, LLC.
Mark Evants. All rights reserved. 

This article for informational purposes only and not an encouragement to enter into debt.  Always seek the advice of a professional knowledgeable about your specific situation.



Back to Bulk Vending Articles Master List