tannat

Hi everyone! I'm new to the business. Well, I'm still deciding if this is something my husband and I want to get into. I was wondering if anyone could tell me which is better, buying beds or leasing them? We don't want to spend a ton on buying beds if it's easier just to lease. I have heard that we should buy a few and lease others. What is the best way to go about it? Any opions would help.

tanu01

Do a search on this site,then come back and ask.
Flick

ZABAZU

Buy!

CapitalFunding

ADVANTAGES OF LEASE/LOAN/CASH -

LEASING
• Payment can be expensed
• Frees capital for alternate uses
• Hedge against interest rate inflation
• 100% financing (No down payment)
• Maximum tax benefits
• No additional debt on balance sheet
• Low monthly payment
• Flexible payment plans
• Easy add-ons or trade-ups
• Preserves bank lines
• Fast turnaround time

BANK LOAN
• Customer gets depreciation
• Finance charges are tax deductible

CASH
• Customer gets depreciation
• No finance charges

CapitalFunding

DISADVANTAGES OF LEASE/LOAN/CASH -

LEASING
• Non-cancelable agreement

BANK LOAN
• Equipment appears on balance sheet
• Extensive documentation
• Uses up credit lines
• Not flexible
• May require compensating balances
• Payment can not usually be expensed

CASH
• Equipment appears on balance sheet
• Disregards the time value of money

perfecttan01

A good part of my beds are repos from leasing companies, most usually nearly new, low hours.
Tell you anything?? Nothing wrong with the leasing companies,,This is simply a tough business and with high
overhead to begin with, it is hard to afford to pay a lease payment, expecially in slow season.
If your start up cash does not include enough for equippment, you have problems!!!

sizzlestan

Leases suck. I was going to do a lease on this Magic Tan booth. A 36 month lease with my credit score being above 700 (which is amazing) had an APR of 38.65%. You are better taking out a home equity loan, run up every credit card you own or borrow from a bookie before you lease. I now know why alot of leased bed salon owners go bankrupt - the lease companies bleed them dry over the life of the lease.

Trust me - make leasing your last option. If you have a 401k or a stock brokerage acct you would be better to sell and pull out the money then pay a lease company. What stock is going to guarantee you 30%+ plus over the next 3 years? Not one!

CapitalFunding

Sizzlestan - Even IF you are were a startup business you should NEVER have to pay that much for a lease??? Which leasing company have you guys used that seem to want to bleed you dry?

Here is a recent example of a customer who Purchased as Classic Turbo 600. This was approved in a day with only an application and bank statements. They have been in business for 2+ years , have good credit (not as strong as yours) and a solid bank balance. They financed $19,900 FMV 10% for 36 months. They put down first/last and the processing fee and they have a brand new revenue maker. The monthly investment was $614.10.

It costs them less than 4% to borrow the money annual before any tax benefits. PLUS it does NOT show up on their credit report!

In my opinion you did get taken advantage of by whoever tried to offer a 38.65% APR.



_________________
Kevin L Stout
Capital Funding Group
(Toll Free) 888.468.5822 Ext.216
(Direct) 425.818.1485
(Fax) 888.689.3041
(Email) kevins@leaseapp.com

[ This Message was edited by: CapitalFunding on 2004-09-24 11:19 ][ This Message was edited by: CapitalFunding on 2004-09-24 11:20 ]

CapitalFunding

Oops...duplicate post.[ This Message was edited by: CapitalFunding on 2004-09-24 11:17 ]

Jgibson

Good info here.