Are you planning to acquire CNC machines?
That makes sense if you’re in woodworking. Woodworking companies need to operate with high efficiency. It’s important for them to create their products in a timely manner without sacrificing quality.
Operating with high efficiency is possible as long as you have skilled workers. But keep in mind that hiring skilled workers can cost lots of money. The cost of their wages can cut into your profits.
Fortunately, CNC machines can can serve as alternatives. They help you operate with high efficiency without adding too much to your monthly expenses.
However, CNC machines are expensive to purchase. So if you want to acquire CNC machines without laying out too much capital, you should consider leasing them instead.
In this blog post, we’ll give you guidelines for acquiring CNC woodworking machines. Also, we’ll talk about CNC machine lease rates.
Guidelines for Acquiring CNC Woodworking Machines
As I said before, most CNC machines are expensive. That’s why it’s preferable to just lease them instead. Besides, leasing can give your woodworking company several benefits. Good CNC machine lease rates can help you improve production without hurting your working capital.
We’ll talk more about that later. First, let’s discuss further why you need CNC machines.
Why You Need CNC Machines
Many woodworking businesses are using CNC (Computer Numerically Controlled) machines. These machines cut, drill, and cart a variety of materials such as wood, plastics, rubber, acrylic and several types of metal.
Having CNC machines can benefit your woodworking company by improving the efficiency of your operations. Also, it will increase your production and output compared to what you’d be getting if you used only manual machines.
Most manual machines need at least a single operator. This requires you to either hire more employees or operate below optimal efficiency. In addition to that, you still need to hire a supervisor to check the operation of your manual machines.
But if you acquire CNC machines, you only need a few people to complete production tasks. Even a single operator can run several CNC machines.
This can help in saving money because it requires less manpower. In addition, it makes keeping your operations running at optimal efficiency easier.
Be Careful in Acquiring Important CNC Machines
You need to be careful in acquiring CNC machines. Most of them are expensive and can cost thousands of dollars.
Having said that, invest in CNC machines that will help you finish your projects quickly. Always get the right kind of machine for your projects' needs so you can get ROI (return on investment) quickly.
Different CNC machines are made for specific purposes. Some of them are made to cut and produce multiple identical pieces while others are made to execute intricate designs. Make sure that you will invest in the CNC machines that are important to your operation.
Choosing Between Buying and Leasing CNC Machines
Before you acquire CNC machines, you need to determine first if you’re going to purchase right away or just lease them. Both buying and leasing have advantages and disadvantages.
As I said before, CNC machines are often expensive. The cost of one ranges from $25,000 to $150,000.
So purchasing CNC machines can cause an imbalance in your capital unless you have a lot of it. Even if you’re buying one on installment, you’ll have to pay a huge down payment before you can use the CNC machine.
Again, this isn’t ideal for most small- to medium-sized woodworking companies. If you want to conserve your capital, you should consider leasing the CNC machine.
Leasing Your CNC Machines
Equipment leasing is a common option for business owners. Leasing allows you to use the equipment without paying a huge down payment. Instead, you will pay for the equipment on a monthly basis.
Most equipment leasing companies offer 100% purchase price financing and have several payment options to help their clients pay for the leased equipment without having cash flow problems.
You can also purchase the CNC machines that you leased. Most leasing companies allow their clients to purchase the leased CNC machine at the end of their contract. Their are several buy out options an equipment leasing company can offer you. A $1 buyout, a FMV buyout, and a10% PUT buyout.
Own CNC Machines Through Leasing
Now let’s talk a little more about how you can own CNC machines through leasing. Many leasing companies like Trust Capital offer different purchase options to their client.
The most common option is the 10% PUT option. This option is given to companies that want to lease equipment and own it afterward.
The 10% PUT option is almost the same as the $1 buyout lease. But unlike the $1 buyout lease, you’re going to buy the equipment for 10% of its original value as a final payment at the end of your lease. This lowers your stream of payments.
If you want more flexible options, talk to the leasing company and arrange an Equipment Finance Agreement (EFA). This type of agreement is more flexible than leases. Basically, it’s a loan to the customer with the equipment serving as collateral. This agreement may end up giving you a no prepayment penalty or a reduced one after a certain period of time. So if paying the loan off early is more important than writing off payment with a FMV lease and a lower monthly payment with a FMV lease than choose an EFA.
CNC Machine Lease Rates
The CNC machine lease rates usually depend on your agreement with the equipment leasing company. But usually, the amount of your monthly payments and CNC machine lease rates are determined by your credit score.
To put it simply, the better your credit score, the better your CNC machine lease rates will be.
The CNC machine lease rates will be used to determine the monthly payments you have to make. However, not all equipment leasing companies offer the same CNC machine lease rates. If you want to get the best CNC machine lease rate, be sure to lease CNC machines through reliable companies like Trust Capital.
Trust Capital offers the best CNC machine lease rates. To give you an idea, here are different CNC machine lease rates and payment scenarios based on the credit score of the lessee.
Let’s assume that you have over three years in business, a good credit score (690) and leased $100,000 worth of CNC machines. This will be your estimated monthly payments and CNC machine lease rates:
$3,069/month for a 36-month term.
$2,380/month for a 48-month term.
$1,968/month for a 60-month term.
But if you have a bad credit score (600 and below), expect the monthly payments to be a bit higher than usual. To give you an idea, here the possible CNC machine lease rates and monthly payments of a lessee with a bad credit score.
$3,655/month for a 36-month term.
$2,993/month for a 48-month term.
$2,605/month for a 60-month term. Y
Final Thoughts on CNC Machine Lease Rates
In this blog post, we talked about CNC machines and how to acquire them strategically. You should consider having CNC machines because they can give so many benefits to your woodworking company.
Operating with CNC machines can improve the efficiency of your operations. Also, it can increase the quantity of your outputs without compelling you to hire more workers.
Having CNC machines can definitely improve your woodworking company. However, you should be careful with how you acquire CNC machines because they are expensive. Make sure to only acquire the machines that are useful to your operations.
Since CNC machines are expensive, consider taking on leases instead for the ones you need. Leasing doesn’t require a huge down payment. You’ll pay for it on a monthly basis instead.
You can save a lot of money if you lease CNC machines. Leasing companies like Trust Capital offer the best CNC machine lease rates. They can help you improve your operations without hurting your capital.
Are you ready to Apply online for CNC Machine leasing? We invite you to call Trust Capital and speak with a CNC Equipment lease specialist that can offer you a no obligation approval, run payment scenarios for you subject to credit approval and go over your tax benefits at 866-458-4777.