Planning to buy equipment for your arcade business?
Leasing is one of the better ways of acquiring arcade equipment. Some business owners prefer to lease arcade equipment rather than purchasing because it doesn’t tie up their cash and gives them tax benefits.
If you don’t have extra cash reserves, arcade equipment leasing is definitely for you.
Whether you’re just starting or an established business, you can still use this type of leasing.
Today, we will discuss the things you need to know about arcade equipment leasing that is coin operated.
Let’s discuss what are the expected rates, benefits, and how you can qualify for it.
So… let’s get to it!
Arcade equipment is expensive…
Not all business owners have the money to purchase arcade equipment. Sometimes, it becomes a deterrent factor, especially for startups.
But...
With arcade equipment leasing, you don’t have to worry about coming up with the money to acquire arcade equipment.
Before you start applying for arcade equipment leasing, you have to know the costs involved in it.
You also need to understand how rates differ between those who have good credit and those who don’t.
The interest rates can also vary depending on the length of business finance operations.
But what are the requirements needed to acquire arcade equipment leasing through the leasing companies?
Unlike bank financing, getting approved for arcade equipment leasing is quick and easy. All you need is to have the basic documents in order to go for game lease of arcade equipment.
Some of these documents include:
If you’re after low-rate offers, you have to make sure that you have a good credit score.
Check your financial background and settle your debts before applying.
Arcade equipment leasing requirements for startup businesses in the united states who are looking to lease arcade equipment up to $150,000 are pretty simple.
You’ll need:
There’s no need for financial statements, tax returns, business plans or any other detailed disclosures.
Leasing arcade equipment that costs more than $150,000 requires a score higher than 700.
Just remember this: The higher your score, the better your chances of getting approved.
Other requirements include:
An existing business can get an approval of up to $300,000 for heavy equipment, while you can get $200,000 for lighter equipment.
Requirements for application include:
If in case you do not meet or are unable to submit the said requirements, you may be able to submit the following instead:
Equipment leasing interest rates vary depending on several factors.
These factors are as follows:
If you had no trouble paying your bills — and are quite on time in doing so — during the course of your business’ operation, then you’ll be offered low interest rates on equipment leasing.
Keep in mind:
A credit score of 650 and above can get an approval of up to $150,000 to buy new or used arcade equipment.
Here’s an example:
If you lease arcade equipment worth $50,000, with one payment due up front your monthly payments would approximately be:
No residual, $1 buyout.
And one more:
Under the 90-day deferral program, your first three monthly payments are $0 followed by the remainder of the term. The remainder monthly payments would be.
No residual, $1 buyout.
If you’re a startup business with a plan, you probably have money saved up to start this company and experience in the family fun industry.
Arcade equipment worth $50,000, and a 680+ credit score, will have an estimated monthly payment of:
No residual, $1 buy out.
Arcade equipment worth $35,000. If you have bad credit, you should expect to have higher monthly rates.
That means if you have a credit score lower than 650, your monthly payments would approximately be:
Typically structured with a FMV buyout or term residual lease.
In addition to higher interest rates, you must also submit other requirements to gain approval:
Businesses often have two options in terms of equipment acquisition:
Outright purchasing, and equipment leasing.
The former is, especially for a startup business, not the best choice, since you have to pay a huge amount of upfront cost.
So why is arcade equipment leasing then considered the wise option?
Let's say if you brought $25,000 worth of new arcade equipment and it brings you $6,000 in extra monthly revenue.
An arcade equipment lease for $50,000 with a 60-month term with a payment of $1,018, Under the $1.00 purchase option, your net income is estimated to be:
As compared to bank financing, there’s no need to pledge your assets with equipment leasing.
You may finance 100% of the equipment’s cost with a flexible plan that meets your budget.
Equipment leasing also offers lower monthly payments, which improves cash flow. This allows you to preserve your working capital for other business expenses.
With a FMV (Fair Market Value) lease, you can deduct 100% of the lease payments as a business expense.
Meanwhile, a capital lease (1% buyout) offers the option of Section 179 tax benefits. You can deduct the lease amount as a business expense in the first year of purchase up to $1,000,000.
Keeping a business line of credit healthy and open is probably one of the more important goals of a company.
With arcade equipment leasing, you can spare your business line of credit with your local bank for other expenses.
Equipment financing also strengthens the cash flow of your business with predetermined monthly line items.
With the rise of the modern family and game creation/development becoming better and better, having an arcade business doesn’t sound too bad of an idea anymore.
One of the many benefits is that with it comes significantly high profit as well as the promises of loyal customers coming back for more.
The only problem now is how you can acquire equipment for your future (or existing) money generator.
The fact is that these machines don’t come cheap, and you may find it hard to simply purchase them and offer cash up front.
Fortunately, arcade equipment leasing is here to save the day. This method of equipment acquisition allows you to gain ownership of an equipment via flexible payment plans. It even offers benefits for your business’ financial background.
To know if you’re qualified to lease, just assess your credit score. A good credit and has been in the business for at least 2 years, guarantees you a low monthly payment.
On the other hand, if you have a bad credit, just be ready to pay higher monthly payments and a bigger percentage down.
As a business owner with good credit and over two years in business, with equipment leasing, you’ll get to finance 100% of the equipment’s cost with a flexible plan that suits your budget. You can even get working capital added onto the same equipment lease term. Add working capital up to 25% of the equipment cost to your agreement.
For more information about arcade equipment leasing, you can contact Trust Capital at (866) 458-4777.