Equipment Financing

May 5, 2004

Hi everybody, it's been a while since I've been on the board, it's good to see some recognizable names.

I know this was discussed last year, but I couldn't find the topic, maybe I searched the wrong term.

But basically, how do some of you guys pay for gear? Sure, I'd love to pay cash and be done with it. But sometimes that is not possible, more times than not for me at least. Are there companies that finance gear? Does anybody have any names they'd recommend?

Thanks in advance.

C.W.

Phil Rhodes · May 5, 2004

Hi,

The more involved you get, the more you realise it's better to allow other people to own the gear. Then, they get to deal with the lemming-like depreciation, buttock-stinging repair bills, and looming obsolescence of equipment that's worth more than most of your friends spend on a car. Rental is life!

Phil

Mitch Gross · May 5, 2004

There are a few companies that specialize in equipment financing. I'm on location at the moment so I don't have the info handy, but you can try the411.com for contacts. Or you could try going to any bank and taking out a small business loan. I've personally never let myself go into debt buying equipent. I never bought anything that couldn't pay for itself within two years and always paid cash. I've often waited for a job to come through and an advance or deposit in my hands to then bite the bullet to buy the next bit of kit. You can reasearch like crazy for free, and then actually make the purchase only when you'll actually need the gear. I used to actually use this as a selling point, saying to Producers "I like your project so much, if you hire me I'll go out and buy a (fill in item of equipment) just for this job!" You'd be amazed at how often this worked and it also insured that I'd get some money up front for the job.

Phil Rhodes · May 6, 2004

Hi,

I bought my camera using a completely normal personal loan. Theoretically the term was five years; I paid it off in just under two due to unexpectedly good (well no, outrageously good) luck with it, but you need to make sure the interest isn't loaded on at the beginning if this is the plane.

Phil

John Pytlak RIP · May 6, 2004

You need to do a "business case" analysis. The useful life of film cameras and kit like lenses and lights is generally much longer than digital cameras and changing digital formats.

Eric Steelberg ASC · May 7, 2004

A Phil says, digital isn't as good as an investment as film. Film cameras and lenses, though on their way out, held value much better because you could still use a camera that's 90 years old. Unless you work alot I wouldn't invest too much in new video equipment as it will be obsolete in 2 years and most productions and DPs always want the newest thing.

Rob Belics · May 7, 2004

Film cameras and lenses, though on their way out

<_<

Michael Nash · May 8, 2004

It's true that video gear depreciates MUCH more quickly than film gear, but that doesn't mean you have to lose your shirt on the investment. Most video gear owners I've known are on what I call the investment "Merry-Go-Round" of leasing/purchasing and upgrading. You invest a certain amount in gear, but like a car lease you continually upgrade to a newer model every several years. You never quite get the item paid off, but the idea is you still turn a profit on your investment. Naturally this assumes you're using the gear regularly as part of a profitable business.

And like a real Merry-go-round, it's hard to jump off without hurting yourself :(

Rob Belics · May 8, 2004

Consumer Reports advises against car leases because you pay way too much for a car you may never own.

Michael Nash · May 10, 2004

Consumer Reports advises against car leases because you pay way too much for a car you may never own.

But the flip side of that is not having a car at all beacuse you can't afford the down or payments on an outright purchase. There's a reason leases exist; they're essentially a line of credit (with the item as collateral) that allows consumers to use a product they couldn't otherwise afford.

And with expensive video equipment, almost no individual could afford to purchase it outright. Nor would they want to half the time, since you NEED to upgrade the technology regularly to stay competive. That's where a lease actually starts to make sense (if the terms are right), unlike with a car that you could potentially keep driving for 150,000 miles.

That said, I drive a 13 year old Honda that's long since been paid off, and own no camera equipment. ;)