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haas financing

M

MBG

Hot Rolled
Joined
Jan 8, 2010
Location
FL,USA
On Monday I am going to talk to a local hfo dealer about financing a mini mill 2. Iwhat can I exppect as far as financing goes? Could put around 10 to 15k down.


Is it like a car dealer when I go to finance this machinery?
 
Haas uses an outside broker for purchase financing. If your running a business, look at the lease option with a $101 buyout at the end. Its easier to deduct the lease payment than to depreciate the machine over 5 years.
 
Haas leasing, CNC Associates.
I believe the minimum amount you can put down is two months payment. Or you can put down more. An addded beneift is you can pay off early without penalties.

Rates are pretty decent, but you have to insure the machine...so unless you already have a policy for that, it is an added expense.
 
I will never lease a machine again. I did through USBank Corp. What a mistake. Business was doing very well and I wanted to pay off the machine and asked them what the pay off was. I was told it was what ever the total of the payments was.

ME: "I am paying it off 3 years I am not paying the interest. I asked when I purchased it if there was a penalty for early payoff"

USBank Corp: "There is on penalty, there is also no advantage to paying off early."

I take full responsibility for this as I should have done more research, but it wont happen again.

In the end they told me if I was going to buy another machine and use them they could probably work with me on it. But I said no thanks I won't be using a leasing company again.

I am sure they work fine but for a small shop that wants to stay out of debt I found they are not a great option.
 
You may also want to look at other means of financing that don't tie you to a 5yr term, I forget now if you're a 1 man shop or larger.
 
Don't have a business yet. That is the goal of this machine purchase but have no work as of the moment.

Do they required the machine to be insured when you finance?
 
As far as I know, so long as you owe someone $ you need insurance on their investment.
I don't see why there would be a different between a lease or "buying".

Don't forget the other 25-50% $ over machine cost for all the other stuff to make it run.

If you can put it on a house mortgage over a longer term, with only a slightly higher monthly rate you're miles ahead. I wouldn't have bought my VMC if I had to finance over 5yrs, not in this economy and their crazy finance rates.

Also perhaps good to register the business and everything in place paperwork wise before starting to buy stuff. It's harder to try to roll it back in if you buy now and only register a business after. But again that might be different in the US. If you can save yourself things like sales tax and so on, very worth it to have it all set up right.
 
I purchased a Haas TM1 in 2004 and the paper was carried by Haas Automation. I have nothing but good things to say about the people there.

I took a job once that took almost 4 months to do and before I knew it, I was 5 payments behind. My customer finally paid and I was able to bring the payments current.

I had heart surgery in 2007 and decided to close the shop and sell the equipment. I still owed a little over $14,000.00 on the machine and the treatment I received from Haas was above and beyond what anyone would expect.

When they took my machine back they sold it for $22,000.00. They took a $2000.00 commission and sent me the rest. They sent me almost $6,000.00.

If and when I get ready to buy another CNC machine, I would buy another Haas in a heartbeat.
 
I bought a Haas just last week and used Haas financing. The terms were fair. PM me if you're interested about the specifics. You do need proof of insurance. From Steve it sounds as though they are a good group to deal with. So far I have no complaints. I looked at the mini-mill and the DT-1, but broke down and bought a VF2-SS instead. From a business standpoint it's not much more expensive and the amount of work and potential cutomers you can attract is much more. I am running a robodrill now and told my customers about my plans. They flat out told me to forget the mini and go wit the bigger machine. And if you finance it, it'll end up being a difference of only $200 or so.
 
As Csharp said, if you lease you will be responsible for the full term worth of payments regardless when you pay it off.
No more leases for me.
BUT!
US Bancorp DOES! offer virtually the same rate on a 5 year ( or whatever your preference ) term loan for equipment financing.
This means you can get a 5 year loan to make the payments acceptable, yet you can pay it off whenever you want, no penalties or remainder of interest.

I for one can't understand the reason behind leasing.
You can depreciate the machine price 100%, and can deduct the interest payments all the same, regardless of lease or loan.
Perhaps someone can chime in about that ....
 
The advantage of a lease with a $1.00 buy-out at the end is that you can write everything you pay each year off on your taxes. So if you lease for 5 years, every cent you pay is written off each year. And at the end you pay $1.00 and you own the machine free and clear.

If you buy it, no matter how much you spend in payments and interest each year, or even cash, you can only write a certain amount off as amortization. I think it is over ten or fifteen years or so that you can write off major equipment purchases.

The government has been trying to change the rules for years and eliminate the $1.00 buy-out lease, but I don't believe they have yet.

The did change the rules lately to allow you to write off a larger amount for equipment purchases, but it was only temporary as a stimulus and I think it has ended.

Just make sure that you can pay off the lease in advance if you want to, although most would use the full five years to pay. Remember that the highest amount of interest is paid in the beginning.

Mike
 
SeymourDumore said:
As Csharp said, if you lease you will be responsible for the full term worth of payments regardless when you pay it off.
Click to expand...

If you lease from Haas, and you get a fat job that will allow you to pay the machine off early you owe only the amount left on the contrace.

You can ask an amortization schedule that will let you know how much you owe after each payment is made.
 
machineit2 said:
The advantage of a lease with a $1.00 buy-out at the end is that you can write everything you pay each year off on your taxes. So if you lease for 5 years, every cent you pay is written off each year. And at the end you pay $1.00 and you own the machine free and clear.

If you buy it, no matter how much you spend in payments and interest each year, or even cash, you can only write a certain amount off as amortization. I think it is over ten or fifteen years or so that you can write off major equipment purchases.



The did change the rules lately to allow you to write off a larger amount for equipment purchases, but it was only temporary as a stimulus and I think it has ended.


Mike
Click to expand...

While not a tax attorney or accountant, I'm quite sure you're misinformed.
You can write off 100% of the equipment cost over 3-5 or 7 years ( the actual term is based on something ... I don't know what ).
In case of a lease, you can choose not to amortize the equipment over those years, rather write off the lease payments as an expense.
Which one you choose is ( I believe ) dependent on you.
If you amortize, you cannot deduct lease payments. Similarly, if you deduct lease payments, you cannot amortize.
With amortization tough, you can still deduct interest portion of your payments regardless of lease or loan.
In either case, the machine price is written off one way or another.
I believe we can choose which method to use but it depends on the equipment, price and your tax strategy.

As far as the first year deduction, Bush started it, now Obama extended the first year write off allowance increase, which is now I believe $250K or some percentage of the total above that. It helps offseting the up front acquisition expenses. For example if you bought a machine for $100K with 30% down + $10K rigging, installation etc etc, you'd have an expense of $30K, yet using a 5 year amortization schedule can only deduct $20K.
With this you now have the ability to take the $30K or for that matter the whole $100K if you want.

Of course I could be wrong.
 
Is that, amount left on contract with full interest of the term? or they remove the interest from the balance? that sentence made me think it still has full interest on it, and often it would, but if they recalculate the balance zero interest, that's good.
 
With Haas (CNC Associates) you pay off earlier and only pay interest on amount remaing.

They require insurance on machine.


Other leasing companies all seemed to want collateral...didn't seem to care about the machine.
 
Just bought a machine from Mazak, not a lease, same thing, no early buy out.

Just a note on why everyone wants to lease you a machine, from what I have heard,

fees are higher and its easier to get the machine if you don't make the payments.

Having leased things over the years, I will never lease again, in fact, if at all possible

this machine I just bought will be the last financed, in the future, cash talks.
 
SIM said:
With Haas (CNC Associates) you pay off earlier and only pay interest on amount remaing.

They require insurance on machine.


Other leasing companies all seemed to want collateral...didn't seem to care about the machine.
Click to expand...


Sim

Care to rephrase that?
I mean paying the interest on the remaining means paying the whole term's interest, since already paid + remaining = total.

Insurance is ( AFAIK ) is required from any and all leasing agencies I've ever dealt with and the policy must state them as the primary beneficiaries.

As long as you deal with leasing cos. who specializes in equipment leasing ( US Bancorp, Intech, Ge Equipment Lease etc ) the only collateral they know or accept IS the machine itself.
Sometimes you even get a better deal through a manufacturer sponsored lease as they provide a guaranteed buyback should the lease default.
With Haas that's possibly the case since they have that 800 hour operation timer.
I purchased my very first EDM through Charmilles, who in turn used GE equipment leasing for the financing. They actually had a 0 down 3 month skip plan and had apparently "bought down" the rate to 2.5% below market average. For a schmuck with no business history and nothing but my bare ass for a collateral, that was a huge help.
 
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