Information On Vending Machine Loans in Australia
One of the hardest loans to get here in Australia is Vending Machine Loans.
Unless your have plenty of cash just sitting in your bank the likely chance of your bank giving you a Vending Machine Loan is very slim unless you have sufficient "bricks and mortar" collateral (such as your home).
Getting credit when you do not meet the criteria of Australia's financial lending institutions (Banks) is very difficult.
It is nowadays more likely that a non-bank financial institution, such as a low-doc lender or a private lender, will come to the party.
They will assess your loan application and then take a risk and lend to you the funds at an interest rate higher than the banks, due to the risk.
They may then even ask for additional collateral ... such as a car, boat, caravan or shares ... something that is registered and can be encumbered to assure them of being repaid the vending machine loan.
They may even ask you to pay a deposit towards your New Vending Machine ... 10% - 20% maybe.
Providing finance for the buying of vending machines requires very carefull due diligence.
It is a process where someone qualified (Loans Manager or Finance Broker) assesses the feasibility of a deal based on the number of factors, some of which are:
- The person(s) behind the loan application
- The ability to service the loan
- What security is being provided
- The number of loan enquiries you have on your credit file (CRA) ... here in Australia every time that you apply for a Loan it goes on your credit file so other lending institutions can see how much you applied for, when and whom you applied to.
So you need to be open and honest with the statements you make on your loan application.
For instance, stating the correct amount of money $$$ you deposit from your takings (weekly or monthly) and then supplying your last 3 months bank statements to verify that what you have stated is correct.
There are many things a lender has to verify and be comfortable with to be able to lend money to a complete stranger.
The lender will ask for many business as well as personal details ... such as providing your drivers licence details, your car rego details and possibly even more information are ALL part of any Loan Process.
Really it's all about the Lender having sufficient information to be satisifed that you have the ability and the capacity to service your Vending Machine Loan.
Many years ago the Banks were stung badly by unscrupulous vending operators. The vendors got vending machine loans for equipment and then later the vendors just disappeared or the machines got "stolen" and the Bank had no real way of re-couping their losses. They had no way to get paid back.
Nowadays, if a bank lent you the money and you didn't pay the bank would "repo" the vending machine and have it picked up from your site and put it to auction. They may recoup some of their monies but NOT all!
So, when it come to loans for vending machines, the lenders need to be more diligent. Hence the lenders look to see how they can best securitise their loans.
In todays times, with fast growing technology, there are other mechanisms that allow a lender some security or "peace of mind" when providing a Vending Machine Loan.
Technology such as "remote monitoring".
As an example, with remote monitoring the lender can see from day 1 the weekly / monthly turnover figures. In the case that the vending operator defaulted on the loan, the lender can reposses the vending machine and then be able to offer it to other vending operators and provide those vending operators with real and honest turnover figures. The lender would then be able to recoup the loan amount or even LEND again to the new vending operator.
As an other example, there is the capability that if a operator didn't repay the loan then the vending machine could remotely have the coin mechanism and note acceptor turned OFF ... so the vending machine will NOT take a credit or hold money to enable a selection or vend a product. That operator would then get a call from the site to "Notify them of a Problem" ... the vending operator would know that the only way to fix it is to make a payment ... once the payment is made the lender then organises the money mechanisms to be turned back ON! ... all this can be done in a few hours or less!
When applying for a Vending Machine Loan, there are some things to keep in mind:
- Have some type of Business Plan ready to show a prospective lender.
- The business plan should include a budget that reflects the projections of income and expenses (weekly and monthly). Most importantly, it should show the "net income" (weekly and monthly) after all costs such as cost of sales, overheads and GST.
- Having this plan will at least show your lender that you are serious about your vending business and also the Vending Machine Loan that you are anticipating to get.
- To ensure that you make an informed decision you need to do your homework and find information about the market and your potential in that market.
- Look at your "niche" and also think of things like "how many machines will you need to grow the business safely".
- Plan on how to get new locations and how to best establish clientele and service those clientele.