Vending companies, companies that sell and distribute equipment such as Vending machines and Arcade games have always had more difficulty obtaining financing for reasons mentioned in a recent post. In this segment, we will discuss what Vending companies can do to increase their chances of getting financing.
Vending companies can seek financing options that use other strengths of their company, such as cash flow, to secure the financing. Instead of applying for an asset based loan, Vending companies can choose from a variety of financing options. Another option is a basic business line of credit. A business line of credit is significantly more difficult to qualify for, however, if a business has a longer time in business and there is strong business and personal credit, they may qualify for a business line of credit.
Further, if the Vending business provides the most recent 3 months business checking account statements, strong recent cash flow will assist them in their financing efforts. If there is more than one owner and the 2nd owner has stronger credit, both owners signing will further allow the business to have a higher chance of qualifying.
Another way for a vending business to more easily qualify for financing is to apply for fewer pieces of equipment at one time. This will allow for a more easy qualification process. The final way is for businesses to voluntarily provide their financial statements.
Many business owners are under the impression that they should try to avoid submitting financial statements, even if their statements are strong. This is an incorrect approach.
If the financial statements are strong, they should be submitted.