Tag

capital equipment

3 insights

A single bar of $712,000 of delivered cost split into the $600,000 machine invoice, $12,000 of freight, $16,000 of rigging, $18,000 of foundation work, $22,000 of electrical and air, $34,000 of tooling and $10,000 of programming and training, with a marker showing that invoice-only financing covers the first segment and leaves $112,000 in cash.

The Invoice Is $600,000. The Delivered Cost Is $712,000.

Freight, rigging, foundation work, electrical, tooling and training add $112,000 to a machine quoted at $600,000. What a lender will advance against those items decides whether the buyer writes a cheque at closing.
Financing StrategyBorrower Advisory
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Three rows comparing a $420,000 dealer offer at zero percent over 48 months against the same machine bought at a discount and financed independently at 9.5 percent. At list the independent route costs $506,482, at a 10 percent discount $455,834, and at a 20 percent discount $405,186, crossing below the dealer offer at a discount of 17.1 percent.

Zero Percent Beats Your Own Financing, Unless the Discount Hits 17 Percent

A $420,000 laundry package at zero percent over 48 months costs $420,000. Financed independently at 9.5 percent, the cash price has to be 17.1 percent below list to match it. At a 10 percent discount it costs $35,834 more.
Financing StrategyBorrower Advisory
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Two panels comparing asset service life against financing term. An imaging unit serves about 60 months but is financed over 72, leaving 12 months of payments on a retired machine. Operatory chairs serve about 180 months but are financed over 60, leaving 120 months of unfinanced life.

You Financed a Five-Year Machine Over Six Years.

A practice buys imaging and operatory chairs in the same quarter. One faces obsolescence in five years, the other runs fifteen. Financing both on a single term loses money at both ends.
Business Case & ROIBorrower Advisory
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