Vending finance example

How can partnership with a knowledgeable and specialist financier improve growth prospects for vending machine operators?

The vending industry today is rapidly evolving. Consumers are looking for a more diverse range of products and a smarter customer experience from their vending machines. Vending operators must ensure their solutions come with the latest technological innovations if they want to remain competitive – but this comes at a cost. As an experienced and specialist financier, Siemens Financial Services (SFS) offers its partners flexible financing arrangements tailored to suit their specific needs.

Expanding reach

In one example, a leading provider of food technology solutions needed a reliable finance partner to support its growth ambitions. The company’s service offerings range from traditional vending and coffee making environments to innovative solutions like micro-markets and smart, cashless payment systems. The company was looking to further expand its capabilities and services across workplaces and public spaces.

Releasing investment

The company’s business model originally entailed using its own cash reserves to purchase the equipment it needed to deliver service contracts to customers. This approach left a high proportion of its free cash tied up in equipment financing, hindering their ability to capitalize on business development opportunities.

As a specialist financier with deep sector expertise, Siemens Financial Services (SFS) can provide tailored finance solutions for UK vending companies. In this case, SFS suggested a back-to-back finance facility, enabling the company to draw down financing as needed.

Back-to-back financing

The back-to-back leasing arrangement from SFS was structured with the food technology company acting as the obligor, allowing the company to deliver service contracts to third-party customers without tying up precious capital.

The arrangement has facilitated upfront funding for equipment acquisition, which the company repays in quarterly instalments, ensuring a healthy cash flow and enabling further investment. This aligns the company’s outgoing payments much more closely with incoming revenue streams. In turn, this stability means the company can inject cash back into the business and pursue wider opportunities.

Finance at your fingertips

For its traditional leasing business, the company is taking advantage of SFS advanced digital tools including SieSmart (SFS front-end sales portal) and API functionalities. These platforms streamline the leasing process, offering swift credit decisions and simplifying transactions thanks to auto-decisioning capabilities.

The digital integration has significantly improved the efficiency of the company’s operations, allowing most leasing deals to be processed seamlessly through these channels. However, for larger deals requiring verbal approval, the dedicated support from the SFS Account Manager and customer service team ensures that the vending supplier receive prompt and personalized assistance.

Enabling expansion and streamlining sales

Through its partnership with SFS, the company is leveraging flexible financing to expand, while also improving the speed and efficiency of its sales process through SFS digital tools.

This example draws on a real-world arrangement that is typical of the service that Siemens Financial Services (SFS) regularly offers vending, catering and facilities management businesses. If you’d like to know how the team can tailor a solution to meet your investment needs or strategic goals, get in touch.