Equipment leasing to own

[tukaniray]

Okay ... I wanted to ask you guys about equipment leasing.

Well, I know I should talk to my business bank about this, but before I do, I wanted to have some opinions from you guys.

I am looking to purchase a new video camera ... only because I no longer have one. I use to own an HD Pro-Sumer camcorder, but then found I too many changes in the field that made me want to just sell it then rent from that point on. That was like 3-4 years ago.

Now, I find, I can't find the camcorder I would like and need for gigs. Plus, I am finding myself getting calls for gigs 2-3 days prior to the gig for Video work and then I have to call like 2-3 places to see if someone has anything for rent, then I sometimes get a quick turn around fee tacked on. Sometimes. Can get costly.

So, my thoughts was to do the equipment loan through my bank (chase) or just keep renting cameras. I find myself turning down gigs here and there for the fact I can not get a camera by the date of the gig.

Thoughts? Should I just keep on doing what I do or look into the Equipment Loan through the bank and pay it off through them?

-Ray-

[kayumangi]

Being in debt right off the bat is not good, because most of your earnings will end up paying for it.

If you can't afford to buy now, you should refactor your pricing such that you have enough to pay for taxes, yourself, rental costs and extra savings to purchase the gear you want.

Alternately, if you are guaranteed to have gigs for six months or more, and the total retainer is enough to cover new equipment (even if you get cancellations), then maybe you could apply for a short term loan or maybe apply for those 'bill me later' plans from stores like B&H or Adorama.

[tukaniray]

Hmm ... thanks Marius. Definitely some food for thought there.

Yea, I checked out the Bill Me Later setup through BH ... still debating on it. I haven't filled my 2012 1st Quarter yet ... so, I think about it once I start getting calls for gigs come the first week of January.

-Ray-

[Howard Barlow]

Originally Posted by kayumangi

Being in debt right off the bat is not good, because most of your earnings will end up paying for it.

Not necessarily true. It depends on his rates and amount of work he contracts. I never paid cash for any equipment in 30+ years.

It reminds me of the time I decided to buy a C41 film (color film, for you noobs) processor. I already had Kreonite paper processors, but had a local lab do my developing.

They advertised how many rolls a day/month you needed to pay for the machine. I went for it, for convenience mostly. It opened up a whole new world for me.

With that processor, I could do 'shoot-n-burn' for attorneys, industry, etc., in addition to my regular portrait/wedding work. In fact, I started getting quite a bit of lab work from other local pros.

I made a fortune with law enforcement, both Texas and Louisiana, Navy, and others, who could not let film out of their sight. They could stand and watch as it went to the tanks, then to the printers, knowing there was no traces left behind when they walked out the door.

The point being, Ray is losing money now, due to camera availability. Obviously, if he gets one contract a year, it may be a bad decision, but if it gets the work flowing in, it will likely be a missed opportunity without it.

Personally, I would go for it.
.....

ETA: I would probably choose a loan, rather than a lease, but that's just my preference.

[tukaniray]

Thanks for your insight Howard.

Both you guys represent the battle going through my head ... lol.

I keep going over my finances, my gigs over the past 6 months, money flow and speaking to my wife to figure things out for this jump. At the moment, I am holding up pretty well, but as the life of the gig goes, that can change in any moment.

Thank you Howard for you thought on going with a loan as oppose to a lease. I am going to figure things with that and see about the pros and cons of the 2.

-Ray-

[Howard Barlow]

Loans. typically, are cheaper. Plus, investigate the lease very closely. Does it, in fact, end up in your ownership? Do you have a buyout option? If so, how much? That figure is known to the leasing company from the outset. Do not let anyone tell you otherwise. "We'll be able to determine that at the end of the lease, based on condition, market value, etc." NOT!

I talked to one company that said their leases did not have a buyout price, but at the end of the lease, they stopped billing, and "We just never come pick it up." Uh...I don't think so. Get everything in writing.

[kayumangi]

If you think about it, essentially me and Howard are saying the same. The amount of anticipated work combined with your corrected pricing will determine if a loan best suits your biz needs.

I mean if you're only going to do ten or less gigs a year and charge like $350 then obviously a loan will not be optimal if your gear costs like $10K excluding interest. Unless you bump your prices really high to catch up or get more gigs. But only you can make that decision.

And I agree with Howard, a loan is better specially if there is no buyout option explicitly included with the lease.

Personally, I'd avoid getting a loan/lease if I could. Just makes my life simpler. Better to save money for your initial capital but that's just me.

[tukaniray]

I agree Marius. It's just that as a Camera Operator and Video Editor/Motion Editor ... I have found to need a camera probably about once a week on average. Gigs range in cost depending on the clients budget.

Thankfully the gigs that I work on are a full crew. So, it's a pretty big budget on an average off once a month.

decision decisions. err ...

Thank again guys.

-Ray-

[carrbowl]

You could always to the Bill Me later deal...then in 6 months you would have a better idea of how things are going. You might have enough money to pay it off, or you can get a loan to cover what you haven't earned yet.

[tukaniray]

Hmm ... interesting suggestion Renae.

But wouldn't that mean hitting my credit twice for one item?

-Ray-

[cameramaine]

you can lease or finance any type of camera or even equipment as long as you have a good company you go through. make sure to do your research and your options. if you lease then you can use it as a write off too. good deal. check out leasing companies, I know of American capital group, they were great. check it out here
Camera Equipment Leasing | Photography Equipment Financing

Scarlet-X Movie Camera Leasing | Scarlet X 4k Camera Financing

[cameramaine]

Also for the above post, the company I wrote up in my previous post doesn't pull your hard credit. So it doesn't hinder your credit or show that it was pulled like that

[tukaniray]

^^ Hmm ... Thanks.

-Ray-