(Image courtesy Stephen Till, A Small Print Shop, Denver)

How to Budget for Equipment Financing

Sean Evans is a business development consultant at Beacon Funding, a leading equipment financing company. He has spent over 30 years in the decorated apparel industry making him an equipment and financing expert. Sean is dedicated to helping small businesses grow and succeed with the equipment they need. He can be reached directly at 847-897-2721 or

Adding new equipment to your business is a surefire way to kick off a period of growth and increased profit, but affording that equipment on a tight budget can seem impossible. Without equipment financing, that might just be the case. But, luckily for you and your business, affording top-notch financing only takes a little research, a bit of planning, and a practical budget.

Figure out what you’re saving for

Before you can do anything else to budget for new equipment, you need to figure out what it is you’re saving for. Not only will this determine the rest of your budgeting plan, but it will also give you motivation. You probably have an idea of the type of machine you’re looking for, but do you know enough to be able to craft a budget around it? To get things started, answer these three questions:

How will I be using this equipment? Determine what you need the equipment to accomplish. Figure out specific goals. Of course, you want to increase profits and grow, but are you going to do that by taking on bigger projects, offering a new service, or something else entirely? Without a defined use for the new equipment, you’ll have a hard time budgeting.

What will help me accomplish this? Now that you know what jobs you need the equipment for, you need to research what machines will fit your needs. You don’t want to decide on a single-head embroidery machine if the projects you hope to take on require a multi-head machine and vice versa. Find a few options that could fit your needs and compare the features. It’ll make the buying process easier later and get you excited about saving.

How much do these machines cost, including delivery and possible training? You don’t need the exact price down to the penny, but knowing the amount you’ll need to finance is very important. It’ll help you determine a possible down payment cost, monthly payment estimate, breakeven point, and even a timeline of when you’ll be able to get the equipment.

(Image courtesy Madeira)

Evaluate your current finances

Now that you have some equipment in mind, you need to get a firm grasp on where you currently stand financially. If you have an accountant, it’d be a good idea to give them a call. They should be able to give you a rundown of your cash flow. If you don’t use an accountant, pull out your balance sheets and tax return and start making your way through it. You’ll want to figure out two things: 1) What wiggle room you have in your current budget, and 2) any ways to cut costs or raise profits.

Finding out what wiggle room you have gives you a basic idea of what you could afford to spend each month on the equipment financing payment. If you don’t think you have enough to get the equipment you need, you’ll have to find a way to either cut down on expenses or increase profits. How you do this will depend heavily on your business, but it is entirely possible that the equipment you end up with will work to increase your profits so that you don’t have to pinch pennies for long. 

(Image courtesy

Learn about the equipment financing process

Knowing your current budget and how equipment financing could fit in means it’s time to learn what exactly goes into financing the equipment you need. By learning the process, you’ll be better able to find a timeline for when you’ll be able to get the equipment, and it will also make the process substantially easier when you’re ready to get started officially. The financing process can easily be broken down into a few simple stages.

First, you’ll apply. Finding a lender that specializes in the decorated apparel equipment industry will make this step and all the others easier. Their application will be tailored to the equipment you’re looking to finance and your business type. It should only take a few minutes to finish and should be commitment free.

Next, an expert consultant will reach out to discuss your exact financing needs. You can discuss any terms you had in mind and ask questions. This consultant will then guide you through the rest of the process.

Now, you’ll submit any financial documents the lender needs to review. This will most likely include a few bank statements and your tax returns. Your consultant will reach out after reviewing these documents to let you know you’ve been approved.

Finally, you’ll sign the financing agreement and receive your new equipment.

Talk to an expert

This step is where you can find out some seriously valuable information about getting and affording the equipment your business needs. A lender with industry expertise will have financing consultants with years of experience ready to help you decide what amount will fit into your business’ budget. By sharing some information about your business and the equipment you’re looking to acquire, the consultant can not only estimate your monthly payment but also help you figure out what type of plan works best. You can find out if you’ll need a down payment, your end of agreement options, and even how long it will take for you to see a return on the investment.

During this step, you might even find out that getting new equipment is closer than you think. With certain plans, you won’t have to wait until you have a large down payment. With others, you don’t have to pay for the first few months. This expert will explore all your options with you.

Best of all, when you’re ready to finance the equipment, you’ll have someone you trust on standby.

Whether you’re ready to enact your new budget or dive right into financing the equipment, now’s the time to do it. The longer you wait to budget for financing, the longer you have to wait to get the equipment your business needs to increase profits. This step doesn’t have to be scary or difficult. Keep working hard, and you’ll be adding new equipment to your arsenal in no time at all.

This article appears in Printwear's 2017 Supplier Guide and How-to Handbook. To ensure you can access this and other industry-focused pieces, subscribe today!