Equipment leases are an ideal way to make money quickly, giving your company access to the best machines for creating spangle transfers (also called sequin transfers) in addition to embroidery machines, dtg printers and more.
Leases offer fewer credit requirements and lower monthly payments than purchase loans. For a startup or growing shop, that means more profits when you need them most!
Are you an entrepreneur looking for an opportunity to add high-profit spangle transfers to an existing garment business? Perhaps you decided the time is right to branch out on your own, as a startup with rhinestone transfers, spangle transfers or custom t-shirts of any kind.
No matter what your business plan, the best way to hit the ground running is through equipment leases. Leases are a cost-effective way to get in on the ground floor of the hottest trends in fashion while adding profits to your bottom line.
Why lease a Spangle Transfer Machine?
Leasing helps keep costs down and profits high from the start—the point in your business cycle where you need to save every penny. Even during economic downturns, businesses turn to leasing for a healthy bottom-line by saving on operating expenses.
According to the Equipment Leasing and Finance Association, the leasing industry is massive, reaching $725 billion annually. And there’s no signs of slowing down.
Over the past 12 months, business-leasing volume has shown a steady 11% increase. In May 2013 alone, business equipment leasing increased nearly 21% from the same period last year.
Numbers don’t lie; equipment leasing has become the best financing solution for businesses of any size.
Why are Payments Lower with Leasing?
Monthly lease payments are typically lower than monthly finance payments. Why is that?
The answer is simple! In a lease, you pay only for depreciation of the equipment. With a purchase, you are paying full price, sometimes more.
Lower payments are due to a thing called the “residual” amount.
If you were to finance a spangle or sequin transfer machine, for 60 months for example, you would pay the full amount, plus interest. On the other hand, if you lease that equipment for 60 months, the leasing company looks ahead and calculates what it will be worth at that time. Then they SUBTRACT its value, called the residual value, from the cost of the deal!
Think of it as the selling price of the item once the company finishes paying for equipment. Leasing embroidery equipment means you are only "financing" the difference between the cash price and the end-of-term residual. For a regular loan, you finance the entire purchase.
This is why an embroidery machine lease, or leasing any kind of apparel decorating equipment can be as little as half the monthly payment of financing.
In other words, consider a machine with a “sticker price” of $25,000. At the end of a three-year lease, the residual of that system could be as much as $15,000.
In that case, you are only "financing" $10,000 for three years.
On the other hand, purchasing outright the exact same system, you pay the entire $25,000—either for a longer term or at a much higher 36-month payment.
In addition, on a lease agreement, taxes are calculated differently. With a conventional purchase on a $25,000 embroidery machine, you are on the hook for the tax on the entire $25,000, during a lease, you are only paying the sales tax on a monthly basis. For example, a payment of $500 per month is actually $500 plus sales tax.
However, sales tax is on the lease amount, not the price of the machine. For equipment valued at $25,000, and a residual of $15,000, sales tax is only on the lease of $10,000.
The best thing about leasing custom t-shirt equipment, like the ProSpangle, is that after the end of the lease, a company simply returns the equipment. Then, it can upgrade to a newer generation.