My wife and i just bought screen printing equipment. we are starting a new business for her. we had 15k to spend on equipment we found a really good deal on screan printing equipment for 10k total. So we have five thousand left. well we looked for a new embroidery machine and decided for a toyota machine. (training, machine 15 needle 1 head 16000.00).. so we tell the guy we are buying it from, fine we will take it but we only have 5000.00 to put down. so he says no problem you can lease these machines.... ok we will take it.
Now for the crazy part.... lease agreement comes this morning and breaks down as follows....
first and last payment...595.44
down payment 3093.89
documentation fee 200.00
plus 60 payments of 297.72x60 = 17,863.20
then a buy out at lease end of 15% =1600.00 total = 23,352.53 crazy???????
Its how the leasing companies make money and is normal.... You are using their money.. and its actually like they loaned you the money.. with the machine as the collateral (so to speak)...
we have leased our big versacamm.. as our accountant said there were better tax advantages rather than getting a loan or paying cash.
wow....
so this is normal.... i have never leased anything before, always paid cash or used home equity...... i just thought 8000 to borrow 16000 was CRAZY....... i guess there is tax implications that my brain can not compute...
yes it is crazy!!! That is why we didnt lease our brother dtg.
I find myself agreeing with Robin. I would buy the embroidery machine when I earned enough $ through screenprinting to pay in full or make a sizeable down payment. If you need the equipment now then check into a $1.00 buyout on the lease.
In the first 6 months....you should pay for your screen equipment....then start hoarding for the embroidery machine...we paid cash and got a huge discount because it was cash....cash is king as they say...LOL
__________________ The Shirt Shak-TSS Grafx-TSS Sporting Goods...Gettin it done since 2001
OK, I will try him now. I really dont want to wait to buy the embroidery machine. seams to me that offering both services will be more profitable... thanks Budd
Bud;
Both methods seem like a great choice to offer your customers and as one said, we bought out our first lease for $1.00. That's legit, not someone taking advantage of the situation.
But consider this as even more important than what you're paying for the embroidery equipment. While they all make it seem easy, there is an incredible learning curve for BOTH methods of decoration. Master one before trying to learn both. You'll be terribly frustrated when you have sewing issues you can't figure out on the spot, need to sew an order, yet have a screenprinting order to do as well.
The salespeople will tell you it's easy and you can get more for embroidery but I'll tell you after 14 years in the business with a pro that's been sewing for over 25 years working along side me, we learn something new EVERY WEEK and that's no joke.
Master one form of decorating, take your time researching legit lease options, and then get into the embroidery....you and your wife will be much happier.
I would definately find a lease company with the $1.00 buyout at the end, this is what I have for my dtg, also maybe doing less than 60 months will save you some interest also. I did my lease at 48 months and it made the payment only a little more but a year less on payments and in the end a pretty good savings on interest.
__________________
Always do right; this will gratify some people and astonish the rest. ~~~Mark Twain BobbieLee
Definately check around with other leasing companies. Also, don't forget to check with your own bank. Most banks have a business banker who deals with equipment leasing.
ok, I think we are going to just use the home equity account to purchase the machine.... i have looked at other leasing company,s the total i would pay at the end is much more than my 6% home equity account.... so thanks for all the reply's. i am sure i will have more questions for the pro's once my machine gets here...Budd :-)
how to pay for new equipment..??? 
