Never, Ever, Ever, Ever, Finance Screen Printing Equipment from a Finance Company.

I bought $5,000 worth of equipment. But it’s going to cost me $20,000 because I’m an idiot. I listened to the finance comany’s sales pitch. I looked at the dollar signs. I stretched my loan payment out over 6 years to keep the payment low, which is a mistake that lots of people make when buying cars and campers, even houses. At least houses tend to appreciate in value.

You see, I had this crazy notion that I was borrowing money; $5,000 to purchase equipment. Not so. They don’t care about the equipment or the $5,000. They want the payment. With a finance company, they purchase the equipment, on the agreement that you pay them for x amount of years, so they can profit an insane amount. Like an idiot, I signed up for a high interest rate, over a long term. It’s a fair deal if you like getting screwed. Yeah, yeah, I know, read the fine print.

Already tired of the payment, I called them to find out how much it would cost to buyout the remainder of the loan. In a cheerfully evil voice the nymph on the other side of the line told me that to buyout the loan would cost $11,500.

After the room stopped doing it’s vomit-spin, I said “What?”. I meant shout the word loudly, and angrily, but it came out more like the sound a mouse makes after its skull has been crushed by the high velocity snap of metal. Like the mouse, the lure of cheese lead me into a trap from which there is no real escape. I’ve heard of mice surviving the metal, but they live on for a short while without their noses. So that will be me. My escape will not be without its permanent scars.

It’s funny. It’s a mistake that I was aware of, as it pertains to other types of purchases. I always said that I would never be upside down in a car loan. For those of you unfamiliar with the term “upside down”, it’s when you owe more money on an item than what it’s actually worth. I’m upside down in my equipment by about $6,000, given the cost of a buyout. I’m upside down by about $15,000 if I go the life of the loan.

What I Should Have Done?

I should have started small like I’ve been encouraging new screeners to do. I didn’t need $5,000 worth of equipment. You can read this post for more on my ridiculous startup mistakes.

Go With A Credit Union Instead - Preferrably A Non-Profit Credit Union.

Credit unions are the anti-bank, anti-finance company. My initial plan of action, until I made the heartbreaking discovery above, was to refinance the loan through my mother’s credit union. That’s what I should have done in the first place. They offer a low interest rate, about 10.5% based on my mother’s credit. The payments would have been about $150 lower every month, and it would be paid off in half the time.

Credit Unions have of the benefits of banks, and all the borrowing power (for small startups) of a financing company, but without the heart-stopping, money-grubbing, fee scheduling that takes place within both.

This post, like most other posts on this site, is geared for a certain start type of startup: the low funds, low experience screen printer. My preference for you is that you don’t purchase equipment through any type of financing. Use my screen printing cheapo startup buying guide instead. You’ll save yourself a load of headaches, even if it does take a little more time to assemble what you need.

If you do finance don’t go through a bank. Don’t EVER, EVER, EVER, EVER, EVER, EVER, EVER, EVER, EVER, EVER, EVER, EVER, EVER, EVER, go through a financing company. Satan made them. He did. I’m convinced of it, and nothing will change my mind.