Leasing a T Shirt Printing Machine
Leasing is a great alternative to the outright purchase of a DTG Printer, also called a “garment printer” or “t shirt printing machine”. There are many reasons why leasing is an attractive option both for startup companies as well as ones expanding into the custom printed t-shirt business.
What are the advantages of leasing over direct purchase?
Why would you want to lease if you have the ability to buy a new DTG Printer set up?
This is the number one reason our new business customers lease a DTG Printing machine from ColDesi. The math is pretty compelling, and while it’s covered in detail in our T-Shirt Printing Business ROI article, here are the basics.
Basic blank dark colored cotton t-shirt = $3.00
Ink for average sized DTG Print = $2.00
Retail sale price for custom Tee = $25.00
Gross Profit = $20.00 each
This makes it EASY to cash flow your business! In fact, with lease prices as low as $430/month, you will not have to sell many custom direct to garment printer t-shirts to make your monthly payments.
Most business text books, posts and articles will tell you that it’s a good idea to have 6 months + of operating capital in the bank before you get started. That translates into have enough money so if you don’t sell a single shirt you will still keep the lights on.
Not selling into one of the many, many vertical or niche markets for custom t-shirts is highly unlikely, especially for someone doing the research that you are right now, but the idea is a sound one. If you can lease a t shirt printing machine for a low monthly payment and keep the cash in reserve, you will be able to take advantage of marketing opportunities down the line, like trade show exhibiting, as well as have the peace of mind of a solid bank balance.
Tax Advantages of Leasing
Any decisions that you make based on tax laws and potential for savings should be discussed with your accountant. After all, tax laws do change and sometimes vary state to state.
Having said that, there are a few fundamental calculations that we can make to demonstrate the value of leasing:
Sales Tax: When you purchase a DTG Printer you will pay sales tax, which is a percentage of the purchase price of the machine. But when you lease, your sales tax is paid monthly, and only on the payment. For example, if you were to buy a $30,000 M2 Direct to Garment Printer in Tampa, Florida, you would be charged 7% in sales tax = $2,100.
If you LEASED the same printer at $899/month, your sales tax burden would be less than $63/month. Write a check for $2100 or $63? That cash flow difference is worth considering.
Main Tax Advantages: The right places to research your tax gain by leasing vs. purchasing a dtg printer are your accountant, or http://www.irs.gov. Section 179 on the depreciation of capital equipment and taking gains and losses on the purchase will be key in mapping out your strategy, but the simple answer is that there are real tax advantages to leasing equipment for your business.
If you would like to discuss leasing options in detail, simply fill out the Contact Us form and request more information in the comments.
What is a Lease?
According to Wikipedia: http://en.wikipedia.org/wiki/Lease, “a lease agreement is a contract between two parties, the lessor and the lessee. The lessor is the legal owner of the asset, the lessee obtains the right to use the asset in return for rental payments”. When you lease equipment with a specified buyout at the end, like the $1 buyout option or the 10% option, you have a guaranteed path to ownership at the end of the contract. The advantage of a lease is typically in low financing payments though, so the majority of people that lease equipment like a DTG Printer end up turning the machine in for a new model and just continuing with a lease payment. Cash flow on leasing a DTG printer is excellent, so this is a very profitable option!
While you decide which DTG Printer from ColDesi is the right one to power you entrepreneurial success, think about whether or not leasing makes sense for you and your company.
If you’d like even more information on leasing terms, pricing and our current lease specials, just fill out the Contact Us form here and you’ll get your answers from one of our knowledgeable salespeople.
Or just choose the Apply Now button below and fill out your application!
Leasing from ColDesi
Adia Capital, LLC, and ColDesi have been working together for years to help get new embroidery, rhinestone t-shirt and direct to garment printing shops off the ground. We work with Adia because they know our business, they know your business, and we can trust them to take care of you and your financial information. In fact, you can even just select the link below, fill out your application and get PRE-APPROVED for an M2, M4 or DTG Viper today.