Build Your Business:

Financing New Decorated Apparel Equipment

Taking out a loan or leasing to increase production capacity can help grow your embroidery, screen-printing or heat-pressing business, but do your homework first

By Greg Bourdon , Contributing Writer

When considering acquiring a new piece of equipment, closely examine both your current and expected future production needs. Image by NINENII –

September 22, 2023

Forecasting is always a bit dangerous. But if past trends repeat themselves, 2024 is shaping up to be a very promising year for decorated apparel, along with many other kinds of printed and decorated products.

Among other things 2024—and a decent chunk of 2023—will see a number of high-profile electoral races across the United States. Even before the official presidential race kicks off next year, there will be the usual primary races. Some are already underway.

This in turn should translate into additional demand for hats, T-shirts, sweatshirts, signs and a myriad of other items that promote candidates, political parties and various other key issues. Add to that a still-solid economy, strong employment and healthy consumer spending, and you’ve got a recipe for potential sales growth.

All of which means decorated-apparel businesses should start preparing now. Falling behind the demand curve only leads to lost sales and aggravation.

Why now? Simply put, it takes time to shop for new equipment, order it and get it delivered, installed and set up. While most of the supply-chain issues that plagued equipment makers during the pandemic have receded, delivery and set up is still rarely an overnight occurrence. In addition, businesses must factor in the time it takes to learn the capabilities of their new equipment and how to use it to maximum advantage—all before orders start rolling in.

Examining screen printing machine for decorated apparel

Bear in mind the revenue generated by a new piece of equipment can in turn be used to help pay off the cost of its purchase. 2023 PWP Studio Corporate Event Photographers

If you’re persuaded the time is right to get some new apparel-decorating equipment, the next big question is how to pay for it? For many businesses, the answer is financing, i.e., either taking out a loan to purchase what you need or leasing the equipment for a predetermined time period.

The reasons for this approach are many. Perhaps the most obvious is you don’t have to immediately come up with a potentially substantial amount of cash to make your purchase. Instead, you can spread the payments out over time, conserving cash flow for inventory, payroll and other business needs at the same time using the income provided by your purchase to help pay off the loan you used to obtain it.

Note, as an added benefit, financing may also allow you to obtain better equipment than you could otherwise afford. Think about the difference between paying a modest amount for an old used car or financing a brand-new one that will both perform better and breakdown less often. There’s a reason why so many people finance the purchase of their cars.

Finally, depending on your circumstances, some of what you pay for in terms of fees and interest may be tax deductible. Same thing with some of the depreciation, or reduction in value, associated with whatever new equipment you’re taking on. (Check with your tax advisor to determine whether these circumstances apply to you and your business.)

One more thing: before we talk about the mechanics of financing, we need to cover the question of whether to buy or lease.

Here again, the car analogy is a good one. If you buy a car outright, you own it from day one. Alternatively, if you lease it, the financing company technically owns it for the duration of the leasing period. When the lease is up, you usually have the option of 1) buying the car at a discount or 2) returning it to the company you leased it from.

In my experience, people who expect to own their car beyond the standard lease period generally lean in favor of buying. Same goes for equipment. A good rule of thumb is that leasing may be more attractive for equipment that will be used for periods of three years or less. Buying, on the other hand, may make more sense for equipment with longer lifespans.

As a practical matter, more businesses finance rather than lease. But again, what’s best for you depends on your specific circumstances. As the saying goes, your mileage may vary.

Either way, be sure and closely examine your equipment needs. Be thoughtful. Anticipate potential growth and changes in the market. Whatever you do, don’t just buy on hope!

Once you’ve got a handle on what you need, it’s time to find a financing partner, ideally one that is experienced in financing the kind of equipment you want to acquire. The right partner can help shepherd you through the process while also navigating any difficulties or uncertainties. Experience helps.

Another good first step is to get your financial house in order. Anticipate the kinds of questions you’re going to be required to answer as part of a standard credit application. Will the new equipment save or earn you money? How do you compare to other businesses of your type and size?

Collect recent bank statements to demonstrate your business income. Pay off any outstanding debts you might have and clear up any issues you might have with your credit rating. For any remaining credit issues, be clear on how they occurred and how they will be resolved. Be aware that most equipment lenders will review the business owner’s personal credit, as well as that of his or her business.

The key is to create a convincing case that you and your business have the experience, track record and cash flow needed to repay the financing you’re requesting in full and on time—the same as you would if a customer were asking for credit from you.

As you are doing so, don’t be afraid to ask questions of your own. Examples might include the following:

  • Given my circumstances, what’s the right term for a loan of this kind?
  • Am I borrowing too much or too little?
  • Should I extend the payment schedule?
  • Can I delay payments until the new equipment is installed and operational?
  • Are there other deferred payment options?
  • How long will the process take?

A good finance provider should be happy to answer these and any other questions you might have.

When you finally get an offer, review it carefully. Be sure you fully understand the terms and conditions, particularly the interest rate, fees and payment schedule, i.e., the amounts and timing of the payments you will be making to repay the loan. Look for any conditions or restrictions. If the loan is large enough, you may be able to negotiate some terms in a way that is favorable to both you and your business.

Without question, there’s a lot to consider. But successfully managing the acquisition of capital equipment is one of a business owner’s most important decisions—one that can either accelerate growth or lead to worrisome cash-flow problems. It deserves thoughtful consideration and strategic reflection.

Financing should be affordable, make your business stronger and position it for long-term growth. Anything that might threaten those objectives should serve as a red flag.

Given the stakes, it’s important to emphasize once again the value in working with an experienced financing partner. Anybody with money can make a loan. However, a good financing partner adds value by helping borrowers structure their financing in a way that is best for both the lender and the business.

Greg Bourdon is currently vice president and senior sales manager at First Citizens Bank Equipment Finance (—formerly CIT Business Capital and Small Business Solutions). First Citizens Bank Equipment Finance provides equipment financing and vendor finance programs to small and mid-size businesses via technology-enabled platforms and market-leading structuring expertise. For more information, email Greg at