Leasing Custom T-Shirt Equipment
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.
Leasing from ColDesi
ColDesi works closely with Adia Capital, LLC, one of the most respected names in apparel equipment financing, in order to help get your business going.
Personnel at Adia Capital know our equipment, model numbers, types and better yet, have experience in financing apparel decorating systems specifically.
Download your leasing application now, or fill it out online and get pre-approved!
Advantages of Leasing
- Leasing saves time and aggravation in finding a lender to grant you credit.
- Leasing allows you to keep up with emerging technology now.
- Short-term leases allow you to evaluate the equipment, to see if it meets your needs.
- Many leases include standard maintenance—saving other operating costs.
- If you use embroidery machine leases as part of your business, there are substantial tax advantages because lease payments are fully deductible.
Common Questions about Leasing
What will a lease do to my cash flow?
Cash flow is a fundamental advantage when considering a lease. The lower monthly payments vs. a purchase make it simple to calculate your return on investment for a spangle transfer system, for example. You can learn about specific ROI for transfers here.
Most leasing companies are willing structure a lease to work within your monthly budget, so you can easily anticipate monthly expenses.
Does leasing include tax advantages?
Leasing custom t-shirt equipment, whether it’s a rhinestone transfer system, dtg printer or spangle machine, will have tax advantages. You can find information here, but should consult your CPA for specifics on your business.
Do I need perfect credit for a lease?
Since a lease is for purchase price minus the residual amount, you are actually “financed” for a lower amount than an outright purchase. This means the financing company takes a lower risk threshold than lenders so sometimes they are more willing to do business with companies who don’t have a strong credit history.
Will leases affect other loans?
It depends on your other Lenders. In some cases, operating leases are not seen as debt. If traditional lending is a part of your current business model, leasing will not jeopardize borrowing from traditional lenders.
What about when my business grows?
As your business starts to take off, leasing allows you to add hardware or upgrade equipment when you need it. You get the flexibility to respond quickly when new business opportunities arise. Leases keep you on pace with technology. You will always be ready to give your clients the best!
Can I terminate a lease early?
Companies can buyout a lease early, often without incurring a penalty. In addition, leases are also generally transferable to another party, with approval by the leasing company.
Am I limited to leasing basic equipment?
You can add multi-head embroidery machines, DTG M Series Printers, CAMS Rhinestone Transfer Machines and the new ProSpangle to your business through leasing – none of which are “basic”!
Typically, leasing provides your business more “bang” for your buck. You get much higher quality equipment for the same recurring cost of a traditional loan. After the end of the lease, a company simply returns the equipment. Then it has the option to upgrade to the latest technology.
This allows your business to get the most advanced tools for the same monthly payments as financing. This lessens the chance of being stuck with obsolete equipment, looking to sell it at a loss. No company wants to own something that simply no longer fits their needs.