2007Legal / Business Practices forum
Financing options for professional cinema camera equipment purchase or acquisition
19 years old. Gear and prices may have changed since.
DisputedParticipants disagreed and reached no conclusion. Read the findings as positions, not as an answer.
What the thread found
- Bank loans for equipment can be cheaper than leases if paid off early, since leasing requires payment of the full amount regardless of early repayment
- Leasing allows upgrading to new equipment periodically as technology changes, whereas owning means absorbing obsolescence costs
- Leasing payments are fully tax-deductible monthly, while equipment loans require depreciation deductions over a multi-year period, though some jurisdictions allow large upfront write-offs
- Bank loans can be structured to place liens only on the equipment itself rather than the company's total assets, depending on credit history and negotiation
- Leases may be easier to qualify for than bank loans and typically require simpler documentation
- Personal guarantees are common with equipment loans and appear as liabilities on personal credit and financial statements, potentially reducing borrowing capacity
- Lease obligations typically appear as contingent liabilities rather than direct liabilities on personal financial statements until default occurs
- High-interest credit card cash advances at promotional rates like 1.9% for life can provide flexible financing without prepayment penalties
- Camera lenses and support equipment often retain functionality for 10+ years while camera bodies depreciate, making selective upgrades cheaper than replacing entire rigs
Depends on
- Specific percentages and thresholds mentioned for tax write-offs and liens reflect US tax law and banking practices from 2007, which may have changed
- Personal guarantee requirements and how they affect credit reporting vary by lender and borrower profile
- RED camera initial purchase requirements and waiting lists were specific conditions mentioned that may no longer apply
- Whether leases include buyout options at the end varies by leasing company and agreement terms