Avoiding Large Equipment Expenses
Purchasing point-of-sale equipment is necessary to a successful business but it is often an expense that surprises many business owners because of the significant cost but also, in some cases, how inexpensive it is. One aspect many business owners try to reduce is the immediate cash-out expense of purchasing equipment. There are a few things businesses can do to avoid the large upfront cost but sometimes it depends upon their situation, such as business history, processing volume, risk, and so forth.
Additionally, most business owners have seen or heard of free Clover devices. Technically, yes, it is possible to get a Clover device without paying the upfront costs. However, in the vast majority of situations, a multi-year contract will be required, monthly fees will be a little bit higher (approximately 10-15%), and rates will normally be a little higher as well (again, right about 10-15%). Such a program basically stretches the cost over a period of time so that, in most situations, the estimated payback is between 6-9 months.
Another option many manufacturers offer is renting equipment. This allows the business to pay a monthly fee (usually without impacting rates) thus avoiding the large upfront purchase. Similar to the Clover situation, however, in most cases this is a 9–12-month payback, meaning that after 9-12 months it would be less expensive to purchase the device upfront.
In conclusion, avoiding the upfront costs for equipment is possible in most situations, but it may not be in the business's best interests. If a business absolutely needs to minimize cash expenditures now and can afford higher long-term costs, signing a multi-year contract a slightly higher monthly might be beneficial. However, if a business is looking at its costs in terms of 2-3 years, it is far less expensive to purchase equipment upfront.
If you have any questions regarding your situation, replacing existing equipment, purchasing new equipment, or something else entirely, simply send us a message and we will be happy to help you find the best solution for you and your business.