Leasing a new press

[head north]

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

[Prosperi-Tees]

Sounds about right, as a startup when I was looking the ending payments were between 2-300 %

[royster13]

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.....

[GraphicDisorder]

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.

[David005]

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

[mk162]

Correct, unless you don't have the work to keep it busy.  Then you feel the payment.

[GraphicDisorder]

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.

[Socalfmf]

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

[GraphicDisorder]

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. 

[head north]

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.

[blue moon]

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

[head north]

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.

[Prosperi-Tees]

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.

[blue moon]

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

[jsheridan]

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.