Lease on equipment

[graphix45]

I'm getting ready to purchase a printer from a local supplier & they refer me to a finance co. they use. I was told what they do is a lease with a $1 buy out when the term is up. I asked if there were any penalties for paying off the lease early and they said no. Today they e-mail the lease paper work and I see nothing about a $1 buyout, but do see where you can purchase the equipment after the term for 10% of market value. Can anyone tell me how you financed your equipment or how this lease stuff works? Should the $1 buyout deal be in writing?
Any advise would be appreciated!

 

[4R Graphics]

It needs to be in writting.

 

[elsignshop]

Don't sign nothing til your lawyer looks it over for you. I bet I know the company you are talking about, I was going to lease one from them and they told me the $1 buy out, but on the lease papers it says you can buy the machine at the end of lease for 10% of what its worth.

 

[Pat Whatley]

Also, do the math yourself and see what the lease is actually costing you. Both the lease proposals we were sent years ago (and ripped to sheds) amounted to almost 50% interest after we added in the fees and everything else. My accountant said it's fairly common, for some reason people look at lease payments and loan payments completely differently.

And don't sign squat if it doesn't say exactly what you thought the deal was. If it's not in writing it doesn't exist. Salesmen will tell you anything to get you to sign.

 

[Mosh]

Any LEASE is a FLEECE!!! Don't be stupid and just pay cash..if you can't pay cash then you can't afford it... Seriously!

 

[graphix45]

Thanks!!! First time buying equipment this way. Leased a truck one time and said then I would never do that again. Hoped this would be different.
How do most of you finance your purchases on big ticket items?

 

[Mosh]

I CAN NOT stress this enough, borrowing money is what has got this country in such a mess!!! Save up, start small. I started with pretty much nothing and have quite a bit and have NEVER borrowed money, not evn a car loan, house mortgage, anything. It can be done just live with-in your means. Do the right thing, and it will come to you. Think about it, if you didn't eat at a restaurant for 9 months how much would that be???? How many Red Bulls do you buy a day???? All that crap adds up, I bet you could save up within a year if you tried.

 

[shakey0818]

I CAN NOT stress this enough, borrowing money is what has got this country in such a mess!!! Save up, start small. I started with pretty much nothing and have quite a bit and have NEVER borrowed money, not evn a car loan, house mortgage, anything. It can be done just live with-in your means. Do the right thing, and it will come to you. Think about it, if you didn't eat at a restaurant for 9 months how much would that be???? How many Red Bulls do you buy a day???? All that crap adds up, I bet you could save up within a year if you tried.

My policy as well.I only have 1 credit card and it never hads a balance over 1k and its paid off efery month.If i cant pay cash i guess i dont need it enough.

 

[graphix45]

Mosh, I agree with you on that for personal stuff. But when it comes time to buy something to hopefully make money with, I think most of us have to beg, borrow, S---- or finance/lease. At least it's better than paying rent on my building. One day I will own the equipment, but I'll probably never own the shop I'm in now and will never get any of the rent money back.
It's just part of owning and operating a business.

 

[National Sign Co. - Print]

never do a $ 1 buy out on printers. Do a fmv for term of lease. Then you can buy machine at dimes on the dollar at the end of lease. Banks do not want machines they want good deals when lease is done....

trust me let the banks make you money. If your ROI can make you money with a lease on machines..

 

[National Sign Co. - Print]

good luck. Hope this helps..

 

[cdiesel]

Talk to YOUR lawyer and YOUR accountant that is familiar with YOUR situation. Every company and every situation is different. What's great for me might the the absolute wrong thing to do for you.

Then, make sure you verify the actual contract that you are sent to sign and have your lawyer go over it.

 

[graphix45]

Thanks for all your advise!

 

[grafixemporium]

Who is the lease through if you don't mind me asking?

 

[visual800]

leasing anyhting IMO is an ignorant option. Either you want it or you dont. all leasing money is a waste of money. go to bank and get a loan, build credit while you pay loans back. IF the bank will not loan you money for this item you do NOT need the item. leasing is a horrible business practice and makes no sense.

 

[National Sign Co. - Print]

leasing anyhting IMO is an ignorant option. Either you want it or you dont. all leasing money is a waste of money. go to bank and get a loan, build credit while you pay loans back. IF the bank will not loan you money for this item you do NOT need the item. leasing is a horrible business practice and makes no sense.

I 150% disagree in a world where technology is obsolete in 24-36 months why on earth would you want to buy outright and tie up that capital if you do not have to.

Guess I am ignorant? Maybe a walk out into production to look at our machines and production firepower will make me feel better about our horrible senseless business practices.

 

[visual800]

I 150% disagree in a world where technology is obsolete in 24-36 months why on earth would you want to buy outright and tie up that capital if you do not have to.

Guess I am ignorant? Maybe a walk out into production to look at our machines and production firepower will make me feel better about our horrible senseless business practices.

Merritt you are correct sir. However I was responding to OP post NOT a wholesale company as yourself BUT I should have taken that comment a step further and added the exception.

YOU are the exception. a full service compnay wholesaling to others I completely understand

 

[SignManiac]

I've been around the block a few times over the years and I'm still here thriving. There are three things I've found you need to be in this business to be successful. Creative design, creative business skills, and creative financing.

If leasing equipment helps you sell hundreds of thousands worth of work or more, and pays back the cost of the equipment many times over, then it makes sense. It's only dumb to buy any piece of equipment if you have no work for that machine, either with cash or leasing.

Just look at how many fools bought printers in the past ten years thinking they could start a wrap business without having the work first.....

 

[graphix45]

Who is the lease through if you don't mind me asking?

Didn't know if I should mention the company in the beginning. (didn't want to break any rules.) The company is Geneva Capital and originally thought I would just be financing outright. Then when the finance co. contacted me they tried to explain the lease with a $1 buyout at the end.
I really do not want to get into a lease or any situation that I don't feel comfortable with. Again, Thanks for all your input on this subject.

 

[TheSnowman]

We did a lease w/ the $1 buyout seven years ago. My accountant recommended it. It's different for everyone, and YOU are the one assuming the responsibility. Talk to YOUR sources and do what works for YOU.