One way to continue the growth is to use companies that offer vault cash services. Here’s an example:

You have an atm location that does 250 transactions a month @ $2 surcharge ($500). You pay the store owner .50 transaction ($125). Assume your buyrate is .10 and you get .30 ($75) on the backend (hopefully you are getting at least this amount, if not contact me asap so I can slap you! After that I can point you in the proper direction)

So from our example above you have a profit of $450. Now depending on your cash flow situation, you are either using your own money or borrowing it at an interest rate.  Throw in time, commute costs, or even armor car costs, your profits are dwindling.  Additionally, and more importantly, this is hindering your growth.

What if I told you we have a close relationship with an atm company that would charge you .75-$1.00 per transaction to handle your entire cash vault operation? This will dramatically increase your cash flow and allow to scale your growth as you reposition your portfolio. Minimum transaction count is 150 transactions a month in order to qualify. You can always read our Sell your atm portfolio blog.

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Access to cash has dried up, causing many atm companies to freeze any sort of growth. In many instances, ATM companies needed to sell off assets and locations to continue operations. As the strong continue to hold their own, there are a select few that are looking to capitalize in the market shift.

Are you an individual with an atm location looking to sell off the location? Maybe you have a few locations that you are looking to sell? Or even a full fledged atm company that is looking to sell off a atm route. The ATM market is an extremely illiquid market these days. The key is having access to the few buyers out there  in your portfolio strategy.

Given this, I propose to you the following. If you are looking to sell off one or 500 atm locations, I have an atm company HIGHLY interested on moving forward. If this is something of serious interest, feel free to contact me at below.

You will receive a reply within 24 hours. Within your reply please include a high level overview of what you are trying to accomplish (example: I want to sell off my 10 location in Chicago)

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For many, an atm location that just does 100 transaction a month isnt worth it. Unless of course you have 50 100 transaction locations all within a 10 mile radius. You can try to grow and get a 250 transaction a month location, but if your footprint is insignificant, you wind up selling the atm location (or worse yet yank the machine to not deal with the headache)..

Since most atm companies do not use armor car, you better off sticking with the local formula. Only grown beyond your radius if you have someone that is a RELIABLE tech and TRUSTWORTHY to deliver cash

The one area that should be looked at is, where does most of your profit come from. If you have 100 machines, and 50% of your revenues come from 10% of your location, then you might want to heavily consider insuring that 10%. Its obvious to say that you shouldnt be insuring machines that are at the low end of your profit margins. Just dont make the mistake of putting a one month cash load on the machine (at least in areas where the risk profile is higher)!

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ATM owners need to think outside the box to get the foottraffic that already exists. Signs that are different will grab the attention of the foot traffic. As an ATM owner, you can even convince the store owner that the importants of ATM Digital Signs will increase foot traffic in his store as well. As a result, you become an even stronger partner with the store owner. In a business where deals are done with a handshake, make sure you are able to grow the store owners business with your knowledge and expertise. In the end, you will both win!

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One atm machine: $2000
ATM Installation (outsource) : $350
Maintenance Call : $75
Phone Line: $20/mo

Thats about the extent of most atm owners spreadsheets. Ah… I know many of you with any sort of financial sense sees the disasters here. The cost of money… regardless of the economy, needs to heavily be thought about. If any atm needs 25k a week, you have interest cost and armor car cost. If you dont have a full grasp on these two variables, your company will not grow and survive (you will get to a point that you can not grow anymore, and for that sales guy, it will kill you personally!).

This brings me to the investment opportunity. ATM companies will offer an outside investors 15-20%  returns. Now, in the present world of Madoffs, you look at that number and become skeptical. While this is smart, with some understanding of the atm business, you can see how you can mitigate this risk while earning a hefty return.

Scenario:
ABC ATM is looking to secure 100k in a cash loan @ 20%.
XYZ Investor if highly interested, but demands the following (which will help you mitigate the risk).

1. The cash can ONLY be used for vault cash purposes, not for hardware. Extremely important
(Your cash is always liquid and never tied to a depreciating asset).

2. XYZ Investor initially shout be of a portfolio that uses armor car services. Why? Accountability. Cash being delivered by armor car gives the Investor protection against internal theft (you’re dealing with cash people, and lots of it!)

3. If armor car is not an option, ask the ATM owner to provide insurance on the atm machine. Now, this is where things get tricky. While this seriously lowers the risk for the investor, its an added expense (sometimes hefty) to the atm owner. Chances are the atm owner will now do this (as from a portfolio standpoint, its actually cheaper for an atm to be stolen than insure every highly profitable machine)

4. An atm owner will ask that you keep your money with the company for X years. They will also ask to provide Y months before removing your cash.  An investor will have a hard time to get around this, as the atm owner needs to know that the cash is there for him to grow. If you are ok with these types of  terms, then the investment is well worth it

5. Contingency: My favorite contingency surrounds non payment. In your contract, have a clause that states if the ATM owner does not provide interest or principal payment within Z days of due date, Investor has rights to surcharge / interchange revenue. Now, not many times will this be executed, but having this as an option protects you in the future. After all, contracts are in place in the event of failure.

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Some tips to think of:

Vault Cash: Many times, companies do not use armor car. While this cuts down on costs, it makes the value of your location less. For instance, by not having your atm setup for armor car, you are forcing that new owner to retrofit the atm with a new lock (ie cencon) or needing to replace the atm machine entirely.  This will greatly effect the valuation.

Contracts: This is the gold part. To unlock the most value, you need a solid contract with multiple years left on it. A good rule  of thumb is to have at least 3 years left on the contact, ideally 5 years. With more years left on the contract, you run a greater chance of getting a higher buyout price. Additionally, you can earn a even higher value if you can get the existing atm location to sign a new contract with the acquisition.

History: The longer the transaction history, the greater the value. If you have less than 6 months of transactional data, you will have a very hard time to sell it. Ideally, you want a solid year of transactions to show the seasonaility of the locations to the new owner.

ATM Hardware: If you are using an older model atm, or there seems to be issues with the atm, you might want to upate the parts. Or better yet, replace the atm entirely. When a new owner is looking to purchase, they look at ways to lower the price by additional work that they need to do.

So How Much Will I Get?
Ah, the question all atm owners want answers too. If you have

1. Solid Contract – 5 years remaining
2. ATM Machine is Armor Car Ready
3. At least one year of transactional data

I can get you 15-18months of gross profits.
Example, you average 500transactions a month, $2 surcharge, with .50 per transaction going to the owner, that leaves you with a gross profit of $750. Assume .30 on interchange, brings us to $900 gross profit. This one location would get between 13k-16k

If we take that same example, but you it doesnt have armor car set up and/or has a small dispenser, the valuation could drop to 12-15 months.

Those are generally not the deal breakers. The deal breakers generally revert back to the contract. This will make or break the valuations of your portfolio. Many atm companies feel their locations are worth more. Thing is, its only worth what someone is willing to pay for it. By trying to cater to the buyer AS MUCH AS POSSIBLE, you run an excellant chance of coming through with a proper sale!

If you have portfolios you are looking to sell, or would like some additional information on setting meetings up with buyers (all under an NDA), feel free to contact me : Contact the author:

In the end, interchange is a small portion of the picture. It comes down to what your giving out (interest rate cost, store owners cut, tech calls) and what your bringing in (surcharge to atm owner and interchange to atm owner). You have to use EACH variable to increase your bottom line.

If you want to do it right, make sure you cover ALL your basis. Make sure services and performances are written carefully…. its notmally the easiest way for store owners to get out of atm contracts.

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