Financing a expensive new camera: seeking experience

[omar robles]

Hello group:

So I am considering purchasing an expensive new camera through global finance group. Just curious if anyone has had any experience in getting a camera through a equipment finance lender? I am assuming its risky because of the high payments. Just wondering for how many years is the typical lease extended to?

 

[Michael Tiemann]

If you don't, today, have a client base that's paying you at least 3x the cost of the payments for the new camera, you should think seriously about buying on credit. Equipment leases do charge less interest than credit cards, but that's not a good reason to go into $50,000 worth of debt over an item that will depreciate faster than you can say Internal Revenue Service.

 

[Greg M]

Do you have clients that hire you and your camera?
If you do, then there is little risk...YOU need to determine this not a group of strangers. Do the math, can you afford the note?

Typical Leases are between 36 to 60 months...again, you need to determine what works for you but I would suggest that any technology should be 3 years or less.

 

[Bob Gundu]

If you can pay the gear off in 6 months with incoming work, go for it. Otherwise I wouldn't do it.

 

[Keith B Plummer]

I've leased cine zooms and cameras with dollar buy outs at the end and it has worked for me. I know people say you should be able to pay for it in a year but stuff happens in this business, so plan out. For most gear if you can get out of it in 24 to 36 months with a small note it seems to work. Just be mindful clients sometimes flake even under contract.

 

[RobMNeilson]

I'm currently financing a camera, and have financed other gear in the past. I always work it that 1-2 days rental will pay for the lease itself and it's worked well to always have the note payment ensured. However that's for a "cheap" camera so it you're going bigger make sure you check out your local rental market. I was tempted to buy an Arri Mini but saw so many folks buying them in my relatively slow market I did not think it was worth the investment (also considering that their is likely another Mini in a year or so).

 

[Nicholas Fitch]

Omar,

If the payments seem high, you should take a step back and re-evaluate the purchase. You can lease/finance your gear with terms up to 60-months. If payments based on a 5-year term still seem high, you should look into a more affordable package, or delay the purchase until you are confident the gear will generate enough income to cover the monthly lease/loan payment.

Also, I would find a company that is willing to document on an EFA (equipment finance agreement) rather than on an equipment lease. A lease will feature an end-option that must be executed at the end of the term in order for you to own the equipment free and clear. Lots of lease agreements have fine print where you need to notify the leasing company 180-days in advance (via certified mail) that you wish to exercise your option at the end. Miss that date and they will automatically bill you for an additional 6-12 months. This is a way many less-than-reputable leasing companies generate additional revenue on a contract... it is very common. Financing on an EFA eliminates all these possible issues with the end option... once the last payment is made, the equipment is owned free and clear.

Not sure what sized package you are looking at, but a $35,000 package should run about $715/mo. A $50,000 package will come in about $1,020/mo. On the smaller side, a $20,000 package would run about $410/mo. Those numbers are assuming a 5-year term, acceptable personal credit, 1st payment due in advance, and at least 3-years time-in-business.

Now if your personal credit score (FICO) is below 675/650 and you have a blemished credit history, rates will be higher. If you are a new business, rates will be higher.

 

[David Peterson]

If the payments seem high, you should take a step back and re-evaluate the purchase. You can lease/finance your gear with terms up to 60-months. If payments based on a 5-year term still seem high, you should look into a more affordable package, or delay the purchase until you are confident the gear will generate enough income to cover the monthly lease/loan payment.

Should remember however most cameras will be quite worthless after 5yrs compared to when new.

And over 5yrs you would have paid a LOT in interest.