TSB
General => General Discussion and ??? => Topic started by: head north on January 30, 2012, 06:35:18 PM
-
I'm looking into leasing a new press and was approved for financing but the terms (specifically the interest) seem really high. Over the course of the lease (5 years) I would be paying about 150% of the original loan amount. That seems high but is that close to standard?
Just wondering what others experiences have been with leasing terms and if you found better rates going through a bank, credit union, etc.
Thanks
-
Sounds about right, as a startup when I was looking the ending payments were between 2-300 %
-
After making payments will you make more money than you are making now?.... Save some labour, give you a life, etc., etc.....If so, do not worry about the amount so much...
Just of curiosity, I phoned a leasing agent client.......25,000.00 piece of equipment will cost 566.50 per month x 60 months with a 10.00 payout....34,000.00 payback.....Works out to 13.17%....Or 36% more than purchase price.....
-
In 5 years you can make a crap ton of money on a auto. The payment actually means nothing, I don't even feel ours.
-
In 5 years you can make a crap ton of money on a auto. The payment actually means nothing, I don't even feel ours.
I feel exactly the same way on my new 10 color sportsman
-
Correct, unless you don't have the work to keep it busy. Then you feel the payment.
-
Correct, unless you don't have the work to keep it busy. Then you feel the payment.
True, but if you are shopping for a auto though I would assume it's a given you have the work. Besides having free time to work on the business is always a good thing if you know what you are doing. If I started over tomorrow, I would have never bought a manual. I would have went for it and got a auto.
I know this much. I use mine probably less than anyone here, and the payment is easy to make. I made over 6 figures with it from March to December and I don't even turn it on but 1-3 days a week and some weeks not at all. If I can make it happen in that little amount of us, a focused screen print shop should have NO problem.
-
Scott
one of the questions I would ask is What is costing you NOT having the press...this is good debt to have..I know for our auto we usually make the payment in the first day or two of the month...then the rest of the week is for labor and overhead then it leaves 2-3 weeks for profit for the company....
so look at it from a different angle...and see what it is costing you not having an auto...
Sam
-
Scott
one of the questions I would ask is What is costing you NOT having the press...this is good debt to have..I know for our auto we usually make the payment in the first day or two of the month...then the rest of the week is for labor and overhead then it leaves 2-3 weeks for profit for the company....
so look at it from a different angle...and see what it is costing you not having an auto...
Sam
Exactly how I looked at it too Sam.
For us we do a ton and I mean a ton of embroidery. So we where having trouble keeping up with it and screen printing. My theory was the auto improves quality (thus sells more shirts increasing that business), plus its faster to print on it, and its easier. So what does that all lead up to? More time to do embroidery, design work, and sell. Which is why my company id doing near 2x what it was when I bought my auto. So while my Auto my not spin daily, its allowing me to make money in a lot of other ways.
It EASILY pays for itself.
-
Scott
one of the questions I would ask is What is costing you NOT having the press...this is good debt to have..I know for our auto we usually make the payment in the first day or two of the month...then the rest of the week is for labor and overhead then it leaves 2-3 weeks for profit for the company....
so look at it from a different angle...and see what it is costing you not having an auto...
Sam
Sam, that's a great way to look at it - thanks.
-
I'm looking into leasing a new press and was approved for financing but the terms (specifically the interest) seem really high. Over the course of the lease (5 years) I would be paying about 150% of the original loan amount. That seems high but is that close to standard?
Just wondering what others experiences have been with leasing terms and if you found better rates going through a bank, credit union, etc.
Thanks
obviously, your payment will depend on your credit (personal and business). Some are doing better than the others. If it's a new company, the rates will be higher, much, much higher.
Rates of 15% are pretty high from what I remember, but we have not shopped for equipment in few years. Things change with time . . .
pierre
-
I'm looking into leasing a new press and was approved for financing but the terms (specifically the interest) seem really high. Over the course of the lease (5 years) I would be paying about 150% of the original loan amount. That seems high but is that close to standard?
Just wondering what others experiences have been with leasing terms and if you found better rates going through a bank, credit union, etc.
Thanks
obviously, your payment will depend on your credit (personal and business). Some are doing better than the others. If it's a new company, the rates will be higher, much, much higher.
Rates of 15% are pretty high from what I remember, but we have not shopped for equipment in few years. Things change with time . . .
pierre
That was my main question - wondering what others had seen with rates, etc. The business is new (just passed our 2 year mark) so I'm sure that is part of it but 15% (or higher) did seem really high.
-
I had ranges from 15-30% and some were real jerks when I asked about the interest rates and got some responses like - "do you want the loan or not?" So I said screw it and bought a used press and will pay cash for my upgrade.
-
I think 15% seems high, but I would take it as the small difference between that and a lower rate is not worth the headache (not to mention that as a new shop we don't have a credit history either). The difference might be $75 per month. just figure that the money you make by getting it earlier will cover that difference.
pierre
-
not to mention that as a new shop we don't have a credit history either
Leasing companys love to hit you with this.. you can have a personal credit score of 800 but because the biz doesn't, you pay a higher rate for being a high risk.
The best way to go is to buy the equipment personally, then lease it to your business.
-
not to mention that as a new shop we don't have a credit history either
Leasing companys love to hit you with this.. you can have a personal credit score of 800 but because the biz doesn't, you pay a higher rate for being a high risk.
The best way to go is to buy the equipment personally, then lease it to your business.
AHA! Now that's a good thought! 'will have to find out what is the difference in the rate.
pierre
-
I had ranges from 15-30% and some were real jerks when I asked about the interest rates and got some responses like - "do you want the loan or not?" So I said screw it and bought a used press and will pay cash for my upgrade.
I bought an embroidery machine in my early 20's and had no credit. I had a nice downpayment but was hoping to lease the rest to build some credit. Talked to the lease company and told them that I had a no interest loan from a family member for the part I couldn't come up with but was hoping to build some credit. They came back with an offer at 19% interest and said "thats the price of building credit do you want the loan or not?" Obviously I took the no interest loan, stopped using a business debit card and got a credit card to start building the credit.
-
not to mention that as a new shop we don't have a credit history either
Leasing companys love to hit you with this.. you can have a personal credit score of 800 but because the biz doesn't, you pay a higher rate for being a high risk.
The best way to go is to buy the equipment personally, then lease it to your business.
AHA! Now that's a good thought! 'will have to find out what is the difference in the rate.
pierre
i had it explained to me by an accountant once. Something along the lines that because the machine is not an asset to the company, it's not subject to depreciation or considered value property or something like that. Also if the business fails for whatever reason, you still own the equipment.
1 more thing.. even after you pay the machine off, the company can keep right on leasing it from you.
-
I got an old 8 color I can make a deal on
-
I just put down 25% deposit on the MHM package and got 5.25% fixed from Wells Fargo on a 5 year note. I have a lot of really good credit and my P&L is clean. They had it approved in 3 days and sent me 15 pages of docs to sign... funny back in the late 90's I would walk into the bank and they would say "How much would you like to borrow today Mr. Young" sign 1 doc and the money would be there the next day. I have been a Wells Fargo customer for 30 years and now they act like they don,t even know me or my company.... times have changed
-
Which MHM press did you get? How much did the press run?
-
Question? How do you know or get information about your business credit score? I havent even thought about it before now.
-
Neither have I. I know business credit monitoring is done by Dunn& Bradstreet, kinda like Experian for individuals. My question would be how do you establish business credit being new and all.
-
Neither have I. I know business credit monitoring is done by Dunn& Bradstreet, kinda like Experian for individuals. My question would be how do you establish business credit being new and all.
I guess the same way you do personal credit. Get a account, a cc, buy stuff on it and make payments. 5 years rings a bell for some reason, idk im an idiot! ???
-
Tough to get credit as a startup though. Does anyone know how tough it is to get a net 30 account at your blanks supplier?
-
Tough to get credit as a startup though. Does anyone know how tough it is to get a net 30 account at your blanks supplier?
that reminded me i have to do that.
-
Neither have I. I know business credit monitoring is done by Dunn& Bradstreet, kinda like Experian for individuals. My question would be how do you establish business credit being new and all.
Take some time and read some credit help boards. when done right, you can skyrocket your business credit worthiness in less than a year.
creditboards.com helped me get my personal stuff back in line, and will help the business when the time comes to incorporate and build corporate credit.