Expert Insight: Future-Ready, Pt. 3—EMV Financing Options

Understanding the pros and cons of EMV POS and gas-pump investment

Richard Browne, Vice President, Marketing, Patriot Capital Corp.

Spinx convenience store gas pump

There are three areas that can provide both jobbers and dealers with an opportunity to optimize financing:

  • Difference in tax rates. Many retailers are often in the 10% to 15% federal tax bracket, while fuel marketers generally are taxed rates approaching 39.5%. On a $10,000 POS system, this results in a difference in depreciation benefit of up to $2,950.
  • Difference in borrowing costs. Often fuel marketers have a more-established credit history than c-store dealers, better documentation and a history of larger transactions, resulting in their ability to borrow or finance equipment at lower interest rates than dealers. This difference, over a five-year lease, can generate significant interest savings on a dispenser or POS upgrade. As an example, a 5% difference in borrowing costs for financing six gas pumps could create a savings of $4,500 in annual interest costs.
  • Section 179 benefits: The anticipated renewal of Section 179 tax benefits for 2015 would allow for accelerated depreciation, creating an almost immediate cash flow impact. This accelerated deduction covers 100% of any capital improvement up to $500,000, and 50% of the next $1.5 million.

Combining these benefits creates an opportunity for fuel jobbers and c-store retailers to work together to provide programs that benefit both parties. 

One option to achieve these leasing benefits is for the jobber to supply the equipment to the dealer for use on his site. This ensures that the dealer is in compliance with network specifications for EMV and other brand standards, while allowing the dealer to improve and upgrade their site image.


Richard Browne, Patriot Capital Corp. By Richard Browne, Vice President, Marketing, Patriot Capital Corp.
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