Equipment Leasing in Lincolnton, NC When a Tube Bender Is Outgrown After Two Years

With a loan, the fabricator owns the bender from the day it is delivered. The funding partner records a lien on the machine, and when the last payment is made the lien is released and nothing more is owed.

With a lease, the lessor owns the bender and the shop pays to use it. At the end of the term the agreement sets out the choices, which can include returning the machine, renewing the lease or buying the machine at a price written into the contract. The words in that end-of-term clause decide who owns the bender after the last payment, so they are worth reading before the first one.

Plumbend takes requests for either path through equipment financing; the funding partner offers the terms.

Illustration only, invented figures: a Lincolnton, NC fabricator prices a CNC tube bender at $68,900. On the loan path, the shop pays $6,890 down and finances $62,010 at an invented 10.65% annual rate over 48 months, which works out to $1,592.16 a month. On the lease path, the shop pays nothing down, then 48 invented payments of $1,712 and an invented $6,890 purchase price at the end to keep the machine.

The full 48-month totals matter less here than the halfway point. A shop that might need a larger machine inside the term can price what each path leaves owed at that point, which is the case worked below.

Illustration only, invented figures: two years in, the shop wins work that needs a larger bender. On the loan path, after 24 payments the invented balance is $34,280.26. If the old bender sells for an invented $44,500, the sale clears the balance and leaves $10,219.74 toward the next machine.

On the lease path, the shop does not own the machine it would sell. If the contract has no early-return option, the 24 remaining invented payments, $41,088.00, can still be owed after the bender goes back. Some leases allow an early buyout or an upgrade into a newer machine; the contract says which, and at what price.

A shop that expects to outgrow a machine can ask for both quotes and work out this exit case before signing. A term loan is another way to buy the larger bender later, with the old one sold to pay down what is left.

Before signing either agreement, the fabricator can find and read these clauses:

• Return condition: what wear the lessor accepts, who pays to crate and ship the bender back, and what happens if a part is missing.
• Early payoff: whether the loan can be paid ahead of schedule and how the interest is figured if it is.
• Upgrade terms: whether the lease lets the shop move into a larger bender partway through, and what the old payments count toward.
• End-of-term purchase price: the exact figure or formula written into the lease.
• Service and software: whether control software updates and service visits are part of the payment or billed apart.

If a clause is missing or unclear, the dealer or funding partner can explain it in writing before the papers are signed.

Illustration only, invented figures: after delivery, the shop takes a job in two new tube diameters and orders three die sets at $2,140 each, $6,420 in all, drawn on a business line of credit.

Paid back after 50 days, when the first job in the new sizes is paid, the invented draw costs $126.64 in interest at an invented 14.4% annual rate.

Dies bought after the machine arrives are not part of the bender's lease or loan unless the agreement is written to include them, so a credit line keeps them separate from either schedule.