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is it possible to lease larger equipment?

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Tracey Vaughan

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Post Sat Jul 18, 2009 4:25 pm

is it possible to lease larger equipment?

hi everyone,
i have started my new venture of t shirt printing etc, and my little shop seems to be going well touch wood. I am wondering if anyone knows if you can lease larger items, such as printers or sublimation stuff as cannot afford to buy larger items just yet.

any info would be great thanks.
tracey :)
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Graeme Harrold

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Post Sat Jul 18, 2009 6:27 pm

In the long run its much cheaper to finance yourself as you would be paying over the odds on finance/leasing charges. Personal or business loan from the bank would be the best option, or sub out the printing work and earn the pennies that want to but outright
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Tracey Vaughan

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Post Wed Jul 29, 2009 5:59 pm

thanks for reply but cant afford to buy outright at moment and do want to risk another fleebay transaction, i always get the dodgy one or it worked before you came or honestly it works only to get it back and it be sat their for months until i can afford it to be mended.

so i thought leasing was the viable option for me at the moment wanted to offer canvas printing to my little shops list also am looking for a frame supplier again any help greatly appreciated.

thanks tracey
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Post Wed Jul 29, 2009 9:22 pm

I would go for a personal loan, if you can get one in today's climate?

By far the cheapest way to borrow, and you own the equipment,

the criteria for leasing is more or less the same as getting a loan, you will need a good credit rating, in both cases.

Peter
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John Childs

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Post Thu Jul 30, 2009 6:45 am

Leasing, Contract Hire, Hire Purchase, Personal Loan, etc etc.

No matter how they dress it up to make it look more attractive, they are just different names for borrowing money.

The difference, as Peter says, is that with Leasing and Contract Hire, the machine belongs to the finance company, and the outstanding balance will sit on your accounts as a long term liability. With Hire Purchase and Personal Loan the machine belongs to you and, fair enough, is still a liability, but you have the value of the machine as an asset to offset it. That can be important later on if you want to borrow more money for further expansion because if the machine is down as an asset it makes your balance sheet look stronger and will increase your chance of getting more loans.

Also if, in twelve months time, business is booming and you need to upgrade your machine, with Hire Purchase and Personal Loan, because the machine is technically yours, you are free to sell it and upgrade to something else.

As I said, they are just different names for borrowing money and the costs are normally similar, so my advice would be that, unless the machine manufacturer is offering subsidised deals to the finance company to make leasing the much cheaper option, go for one where the machine is technically yours and retain flexibility to sell or upgrade at your convenience, not their's.
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Jason Xuereb

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Post Fri Jul 31, 2009 8:17 am

We Hire Purchase all our equipment and we can pay the lease out to own the equipment outright if we want to sell it at any time. You just end up paying all the interest over the life of the lease.
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John Childs

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Post Fri Jul 31, 2009 8:40 am

Jason Xuereb wrote:We Hire Purchase all our equipment and we can pay the lease out to own the equipment outright .

Which is it Jason? Hire Purchase or Lease?

They're two completely different animals.
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Jason Xuereb

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Post Fri Jul 31, 2009 8:58 am

Hire Purchase. For instance say I wanted to sell my machines today I'd have to pay out the whole hire purchase to be able to sell it. Because that's when the ownership transfers to me.

That's what I meant by paying it out.
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John Childs

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Post Fri Jul 31, 2009 9:38 am

OK Jason, I understand now. I just got confused because you said it was hire purchase, then went on to say that you could pay off the lease.

In the UK, if you want to settle hire purchase early, you don't have to pay the entire amount of interest for the whole period of the loan - only that part for which you have actually used their money, plus some for admin. There is an official formula laid down for this calculation.

Here, ownership transfers when the total outstanding balance is paid. Whether that's at the end of the agreed term of the loan, or an earlier date, doesn't matter.

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