Lease, Loan or Buy?
In the printing industry, equipment leases are a massive money-maker and estimated to be worth about $3 billion. Sign shops, print providers, and small print shops are leasing everything from presses and copiers to colorimeters and UV printers in an attempt to stay on top of changing technology without having to make massive capital investments.
In fact, I’d be willing to bet you have at least one piece of leased equipment in your shop right now, if not more.
There are some tax benefits you can get from leasing that can be overlooked. So, if you are thinking of making an end of the year purchase, now is the good time to consider lease financing. Before you do, lets go over the common mistakes you can avoid.
And, while a lease payment is often significantly cheaper than a loan payment, those costs can still add up. But did you know that carefully reviewing every lease can save you as much as 5 to 15 percent over the total cost of the lease? So, how do you do it?
Always Get Quotes
Your clients will visit multiple printers for quotes on jobs, so do the same with your next lease agreement. Remember, you don’t always have to lease from the manufacturer itself, so get multiple proposals from various leasing companies and let them know they’re bidding for your business.
Get All the Documentation With Every Quote
Before you can really evaluate a proposal or quote, you need to see the fine print (because that’s where a lease can hurt you). So, ask the bidding lease company to include every piece of documentation about the lease transaction.
Watch Out for the End-of-Contract Terms
Make sure you fully understand the end-of-contract terms before you sign a lease. For example, most lease terms require that you notify the leasing company by a certain date if you plan on purchasing or returning the equipment. If you fail to do so, the lease could be automatically renewed, adding months and sometimes even years on to an existing lease.
Get Help When You Need It
You should read over every lease agreement or proposal very carefully and if you don’t understand it or the terminology, then get help. There are lease experts out there who, for a fee, will consult with you, review a lease on your behalf and even help you negotiate the terms.
The NAPL offers a lease review service through their Print Consulting Services division. You can find them online at NAPL. Alternatively, you can also speak to your attorney.
If you would like to talk to someone further, feel free to contact Scott Maxfield at www.lloydsofindiana.com or call him at 800-636-6848.