So, we are on the edge of purchasing a VF2ss - but at the last minute I am not too confident in the lender we are working with so far. Our rep has been very helpful for awhile, but the numbers arent adding up for me.
The offer in their terms:
$74,995 financed
61 months
10% down payment ($7,495)
$1,436.71 per month
Reported 7.85% rate
They want a security deposit equal to a month of pay, and a payment up front - seems odd for financing to me.
These numbers are stated as without sales tax.
My understanding is we are financing 68k, given our deposit, and at 7.85% for 60 months should be $1,335/mo.
They initially structured it as a lease, which also was not clear to me.
Lease offer
Financing 70,877
60 months
Purchase option "FMV 10%"
$1,436.86 per month
This seems wrong to me, because the payments are equal to financing 100% of the machine instead of ~90 - not less the residual. So it seems they want to finance the full amount and still seek 10% for buyout. No reference to a documented residual or projected FMV. When I tried addressing this for clarification with our guy he did not seem to understand my point, gave no explanation for how they arrived at the numbers, and chalked it up to 'thats how equipment leasing works'. All of my reading says otherwise.
My partner and I are applying for financing under a new LLC, but we are filing jointly and co-borrowing with our existing company which has 3 years of >$1MM/year revenue. We keep six figures in the bank at all times, can demonstrate comparable credit, and have decent to good personal credit.
Can someone familiar with the equipment finance world explain if I am misunderstanding and the financing is a decent offer, or if we are being screwed? I may talk to Haas about financing but was told they take about 2 weeks which is why we initially avoided it. The lender our HFO referred us to wants 25% down!
Posting here to gather feedback before the weekday begins.
Thank you
The offer in their terms:
$74,995 financed
61 months
10% down payment ($7,495)
$1,436.71 per month
Reported 7.85% rate
They want a security deposit equal to a month of pay, and a payment up front - seems odd for financing to me.
These numbers are stated as without sales tax.
My understanding is we are financing 68k, given our deposit, and at 7.85% for 60 months should be $1,335/mo.
They initially structured it as a lease, which also was not clear to me.
Lease offer
Financing 70,877
60 months
Purchase option "FMV 10%"
$1,436.86 per month
This seems wrong to me, because the payments are equal to financing 100% of the machine instead of ~90 - not less the residual. So it seems they want to finance the full amount and still seek 10% for buyout. No reference to a documented residual or projected FMV. When I tried addressing this for clarification with our guy he did not seem to understand my point, gave no explanation for how they arrived at the numbers, and chalked it up to 'thats how equipment leasing works'. All of my reading says otherwise.
My partner and I are applying for financing under a new LLC, but we are filing jointly and co-borrowing with our existing company which has 3 years of >$1MM/year revenue. We keep six figures in the bank at all times, can demonstrate comparable credit, and have decent to good personal credit.
Can someone familiar with the equipment finance world explain if I am misunderstanding and the financing is a decent offer, or if we are being screwed? I may talk to Haas about financing but was told they take about 2 weeks which is why we initially avoided it. The lender our HFO referred us to wants 25% down!
Posting here to gather feedback before the weekday begins.
Thank you