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A lot of new technologies have recently been introduced in our industry, such as anti-reflective coating, digital surfacing and robotic finishing. All of these represent the future of our industry and present us with even more opportunities to cut costs and provide more to customers. Anyone who makes a big investment must consider how to finance it. Two common ways of financing purchases are leasing and bank debt. 

Bank debt is primarily borrowing a specific sum of money from a lending institution for a certain term, interest rate, and amount. If you have a strong balance sheet, good history and the bank determines that you are very likely to pay back the loan with no problem, bank debt is an excellent option and can cost less in finance costs than leasing. Also, with bank debt, you take ownership of the equipment subject to a lien until the debt is repaid. However, sometimes the bank may require additional collateral if it is determined that the debt is riskier for your firm, doesn’t understand the industry, or hasn’t had a long relationship with you.

Next month, in Part 2 of this series, we’ll discuss two basic forms of leases, capital and operating leases.

—Jason A. Meyer, SVP, HPC Puckett & Company

HPC Puckett & Company specializes in mergers and acquisitions of wholesale optical laboratories. Send comments or questions about this article to Jason A. Meyer.