Operating Vending Equipment Leases

Operating leases can not only provide increased ROA (return on assets), but also reduce the operator’s risk by enhancing flexibility in allocating assets to the highest revenue generating location. Leasing Antares vending equipment is no different than trucks, copy machines and automobiles.

Operating leases accomplishes the following benefits:

· Matches the revenue stream of a contract with the lease cost of equipment.

· Reduces the fixed cost of a purchase with the flexibility of a lease.

· Frees capital for other strategic requirements

· Protects against equipment obsolescence.

Purchasing versus leasing

The past few years have seen vending equipment manufacturers introducing more new products and features than in the previous years. These product improvements are difficult for the Antares operator to exploit as the acquisition of the new equipment increases their fixed costs as well as presents the problem of disposal of old and obsolete equipment.

Usually, one or two things must happen in order to improve return on assets and cash flow: 1) profitability must be increased, or 2) the investment base must be reduced.

Operating leases will allow Antares vending operators to increase ROA and obtain a better balance between fixed and variable costs. Operating leases provides the operator with the flexibility of reducing fixed costs by making the equipment a variable cost and eliminating the investment on the balance sheet.

Specific benefits of leasing equipment

With an operating lease, an Antares vending operator can decide to lease the equipment for a period of time, normally one, three or five years. At the end of the lease period, the operator can re-lease the equipment, return the equipment and upgrade to a newer machine, or buy the equipment at fair market value.

Very few operators rent or lease their purchase of vending equipment. Operators will normally buy equipment, even if their fixed costs increase and the flexibility to upgrade to new equipment minimizes.