Lease/ financing interest rates for new machine?

[greasywheats]

Hi All,
I know this is a tough question to answer given the variables, but I am looking at purchasing a ShopSabre 5x10 cnc router and would like some guidance on what I should expect for interest rates from a financing company? I have very good credit (43 yo) an my business has been around 2+ years with good/growing revenues. If you look like a solid credit candidate, what range of interest rates would be expected?
Thanks

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[Jim Dawson]

Rates in the 9-15% range with maybe a 60 month term would be the norm unless your name is GM or Ford. Go have a chat with your bank or credit union to understand the local market, they may be able to offer very competitive rates.

Leasing is an option, but that is the most expensive way to borrow money. On the up side, the lease payments are deductible as an operating expense. If you go this way, be sure that there is a very low buyout (like $1) at the end of the lease term. Read and understand the lease terms, you can get screwed if you're not careful.

The buying option is the best because you can expense out the entire purchase in one year if that is advantageous to you. Consult with your tax advisor.

Having said that, it's my preference not to borrow money to buy machines. IMHO, it's more cost effective to buy a good used machine and pay cash for it.