Doing a Repo next week... any things to look out for?

[royster13]

No problem Peter, I agree with you.

Granted, I'm not a lease kind of guy period.  If you do the math that is usually some brutal interest rates!

With a lease you should never concern yourself with the amount of the payment or the interest rate because how much you can carry to the bottom line is what is really important....

[Gilligan]

Well next time you buy some gear cash send me about 20% of that price since you don't mind tossing money in the trash.

My point was that if you don't have to LEASE then don't.  People in this business seem too quick to jump on a "lease" because it seems easy... easy ain't cheap usually.  Go to the bank and get a proper loan if you can, or pay CASH like our boy Jeff.

[Frog]

With savings not paying any real interest to speak of, cash sounds like a sensible deal for those who have actually turned a profit for a few years and put something away.

[royster13]

I did not say be stupid.......Obviously if you lease equipment because you can and not because you need it and it makes financial sense it is the wrong thing to do....

But consider things like DTS set-ups, gas driers, automatic presses.......In many operations these things pay for themselves very quickly....So if you can not pay cash, a lease is often a very wise thing to do....

[Chadwick]

Somewhat irrelevant, but the workhorse I use is a 4 station, 8 head.

[Prosperi-Tees]

I am in that predicament of whether to pay cash or lease. If I pay cash I'll exhaust all I have put away. So I'm kinda see it both ways.

[Gilligan]

If I gave you the opportunity to invest in something with a GUARANTEED return of 18% annually would you take me up on that?

That's what you get when you pay cash vs giving someone else your 18+% interest.

Penny saved is a penny earned never rang truer.

[beanie357]

Gotta disagree with the post on"don'worry about payment"
Short sighted. You must worry about the payment. If things go poorly, how are you gonna pay?
Leasing is pricey. If you can' pull a loan at a traditional rate, maybe throw some cash in to get a better rate or payment.
Even though cash has no value as a savings vehicle nowadays, if you are out of cash, you are out of biz.
Ponder the query carefully.
Maybe get rostyster to sign for you. Hee Hee Hee

[royster13]

If I gave you the opportunity to invest in something with a GUARANTEED return of 18% annually would you take me up on that?

That's what you get when you pay cash vs giving someone else your 18+% interest.

Penny saved is a penny earned never rang truer.

I think we are talking about different things.....If you "need" a piece of equipment and have cash to pay for it, certainly it is best to pay cash....But if you "need" a piece of equipment to make more money, you are better off leasing it rather than doing without it..

[Gilligan]

If I gave you the opportunity to invest in something with a GUARANTEED return of 18% annually would you take me up on that?

That's what you get when you pay cash vs giving someone else your 18+% interest.

Penny saved is a penny earned never rang truer.

I think we are talking about different things.....If you "need" a piece of equipment and have cash to pay for it, certainly it is best to pay cash....But if you "need" a piece of equipment to make more money, you are better off leasing it rather than doing without it..

I was referring to Gerry's post here when I wrote that.

I am in that predicament of whether to pay cash or lease. If I pay cash I'll exhaust all I have put away. So I'm kinda see it both ways.

That being said... I still suggest you find better options.  It's not "lease or don't"  as others have suggested, got to the bank and get a more traditional loan with MUCH better rates.

Why throw money away if you don't have to?

If you need a piece of gear that cost 50k and it will make you 100k the first year you own it.  Absolutely get it... but why pay 70k for that piece of gear (after leasing) when you could have only paid 60k from a bank.

I'd rather have an extra 10k in my pocket than in the leasing companies pocket.  Obviously these are fictitious  numbers... in fact they may be UNDER exaggerated.

[royster13]

Gotta disagree with the post on"don'worry about payment"
Short sighted. You must worry about the payment. If things go poorly, how are you gonna pay?
Leasing is pricey. If you can' pull a loan at a traditional rate, maybe throw some cash in to get a better rate or payment.
Even though cash has no value as a savings vehicle nowadays, if you are out of cash, you are out of biz.
Ponder the query carefully.
Maybe get rostyster to sign for you. Hee Hee Hee

You are trying to read something else in to my words.....I never said "do not worry about payment"....Of course you have to worry about your payments.....But if there is a good "business case" to lease a new piece of equipment and it will help you carry more to the bottom line, then the payment will make sense....

Being in business is a risk....Some folks take more risks than other....But typically those who take the biggest risks end up in a better position than the rest....

[royster13]

I'd rather have an extra 10k in my pocket than in the leasing companies pocket.  Obviously these are fictitious  numbers... in fact they may be UNDER exaggerated.

Is it really 10k or are there some tax benefits that will actually lower the difference?.....

As far as rates, it appears we have much better rates in Canada....I just talked with a client who is a broker at Dominion Leasing and he said he has seen rates under 6% with typical rates over 3 to 5 years being 8% to 9%......

[Gilligan]

Spending useless money (more interest than necessary) for an extra tax write off is a terrible idea.

Maybe I'm ignorant but I can't see any tax breaks on a lease vs regular loan from a bank that would save you the difference in the interest payments.

[Prosperi-Tees]

I just like having money in the bank