Equipment Leasing with Dick Clark Associates

October 23rd Show Audio

Please find some links and notes from the 2 Regular Guys Podcast. On this week’s show, we’ll be talking leasing in and outs, and financing your business in general. Our guest will be David Harding, National Account Manager with Dick Clark Associates. Dick Clark himself may be joining us as well.

Sponsored by: EnMart

Our regular listeners know this, but 2 Regular Guys is all about garment decorating, a bit of fun, and no rants or lectures or selling. We are not doing this for our employers, but rather for our industry. For the past two years, 2 Regular Guys has been the first and the most listened to garment decorating industry podcast on this planet! We are humbled by all of you tuning in each week. We work hard to bring you information that will make your business better, and our industry better. Take a look at our incredible weekly guest list and you’ll understand where this industry goes for news, interviews and the heartbeat of garment decorating. Thanks for listening!!

Equipment Leasing with Dick Clark Associates

What Is Equipment Leasing / Financing?

  • Leasing
  • Fixed Term Rental  
  • Rate Factor – No Interest Rate
  • Paying off early – Once you get further in this matters less
  • Cash should be worth more
  • Tax deductions
  • Capital Lease, Operating Lease? – No one really uses these terms anymore
  • Common Purchase Options
  • Typically Terms are 24 – 60 Months
  • Capital Lease  = Example: $1.00 Buyout ) ‐ Bargain Purchase Options
  • Operating Lease (some call ‐ true lease) = Example:  FMV
  • $1.00
  • FMV
  • FMV not to exceed 10%
  • PUT (Pay Upon Termination)
  • Standard is 2 Advance Payment
  • No Purchase Option
  • Upfront Monies (advances / down payments)
  • Equipment Finance Agreement (EFA)
  • Main different with a lease vs a loan is the buyout – both have upfront monies, term, etc.

Things to watch out for when leasing:

  • Quote Vs Docs – Pre‐Approval
  • Using Rate rather than terms – Payment / Monies Upfront / Purchase option
    • The Type of equipment should determine the term and purchase option
    • Purchase Option – Make sure you are getting what you want
    • Technically a lease does not have an APR trust – Check BBB – References (sometimes docs are hard to understand)
  • Giving Monies Upfront – Make sure the terms does not change – Work with someone you
  • Evergreen Close
  • Paying off Early…….

What does it take to get a lease approved?

  • 3 main Criteria:
  • Personal Credit  
  • Not just a score
  • Good Score but no depth
  • Bad score, but good history – maybe old issues
  • Cash Flow
  • Time in Business
  • Business Credit
  • Paynet / D&B / Paydex / Experian Business report
  • Strength will determine approval / terms
  • Start Up – No Time in Business
  • Unfortunately  80% fail in first two years
  • This is not to scare anyone – just why money is more expensive  
  • Just like when you were young and looking for credit (no history)

Why Should You Lease?  

  • Conserve Working Capital
  • Conserve Bank Lines
  • Protects Against Inflation (monthly payment does not change)
  • Tax Advantages
  • Builds Credit History
  • Flexible
  • 100% Financing
  • 30% of all equipment sold in US is leased
  • 8 out of 10 companies lease some or all of their equipment

4 Ways to Pay

  • Cash
  • Bank  
  • Credit Card
  • Lease / Financing  

Cash Vs. Lease   

  • Pre‐tax dollars vs. after tax dollars
  • Customer buys 40k worth of equipment
  • Has to make $53,333.33 to net 40k after taxes (assuming 25% tax bracket)
  • Standard payment on 40k = $850.00
  • $850 * 60 months = $51,000.00
  • 2008 – Cash Flow Became King (unknown expenses in the future)
  • D&B says business can make 12% if put back into business (old stat)
  • ROI – Let the equipment pay for itself
  • Should put monies to items that appreciate in value and lease or financing items that depreciate in value.  

Lease vs. Bank Loan

  • Banks don’t buy everyone (don’t get discouraged if you get turned down)
  • We are quicker
  • We know the industries we deal in
  • Only finance equipment
  • Banks require financial statements
  • May need bank credit in the future – Credit lines
  • We only take the equipment as collateral
  • Typically no other liens, and no blanket liens
  • No checking / savings requirements
  • Monies down – Banks want 20%

Lease Vs. Credit Card

  • Minimum payments can be changed (if missed or late)
  • Credit issues – Ratio’s ‐ Credit in the future, insurance
  • Cash flow ‐ Supplies / Marketing  

What About A High Risk Lease / Bad Credit?   

  • Sometimes Not everyone starts under the best circumstances
  • Customer is going to pay double the equipment……
  • Is this a good business decision?
  • Question – How much will they make with the equipment?
  • Example:
  • Revolving credit is a major issue with credit scores
  • Cost of Equipment: $10,000
  • Payment: $333
  • Total Out of Pocket over 60 months: $20,000.00  
  • Equipment makes $1,500 a month
  • Profit after payment – 12 months = $14,004.00
  • Profit after payment – 24 months = $28,008.00   
  • Profit after payment – 60 months = $70,020.00

Section 179

  • How It works
  • Benefits
  • How does financing / leasing work with it

Always think of how am I am going to pay for this:

  • Don’t want to waste your time – If you can’t afford it or have credit issue work towards solving those problems.
    • Take the steps you need to set yourself up in the future – we can help.
    • Talk to us early to get an idea of payments so you can start to budge
  • Get what you can afford
  • Deferred or seasonal payments
  • With Financing you can start making money the first month
  • Don’t just jump into something but always think about if you had the equipment how much money could it make you?  

We are not Tax Professionals – Talk to your CPA


  1. SGIA Atlanta – 11/4 to 11/6
  2. ASI Orlando – 1/5 to 1/6
  3. PPAI Vegas – 1/12 to 1/14
  4. ISS Long Beach – 1/24 to 1/26

Other News/Events

Terry’s Books

Screen Printing: A Practical Guide to Starting Your Own T-Shirt Business Just $4.95 as an e-book.

Direct to Garment: A Practical Guide to Starting Your Own T-Shirt Business Just $4.95 as an e-book.

Scheduling and Estimating Production Time for Garment Screen Printing Just $2.99 as an e-book

EnMartThis show is brought to you for a full hour by: EnMartWhile EnMart is well-known as a supplier of quality garment decoration supplies and accessories, we pride ourselves on being more than just a seller of products. At EnMart, we are here for our customers, to inspire, educate, and provide the tools to help grow their businesses.

Whether your interests lie in sublimation, embroidery, or any other garment decoration, EnMart’s knowledgeable and experienced team is here to help in any way they can.

This show is for the listeners so please make sure to ask us some questions or give us some topics you would like us to discuss. Also if you have any event or upcoming items related to our industry that you would like us to bring up on the show, please contact us via our Facebook Page. Also make sure to interact/follow us on Twitter or Google +. You can also find information over at our You Tube Page.