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My husband and I recently started shopping for a replacement for my 10-year-old car.
We were SO shocked at car prices with inflation and the ridiculous interest rates (even with good credit) compared to the 0.9% we got a decade ago.
As such, we still haven’t bought a car and are enjoying not having car payments.
So, how does this relate to embroidery?
Purchasing an embroidery machine is a lot like purchasing a new car!
Embroidery machine prices are NOT low, they’ve seen huge increases with the pandemic, and finding embroidery machine financing is now no longer as easy as walking in and having your dealer offer a low-interest loan.
However, not all hope is lost, especially if you’re flexible with timeline for purchase and machine selection.
Check out this list of places to look when thinking about financing an embroidery machine purchase!
Tips Before Purchasing a Machine
Before rushing out to finance your next embroidery purchase, don’t forget some basic things.
- Check multiple financing options to compare rates, downpayments, repayment terms, and prepayment penalties.
- A Longer repayment period means a smaller monthly payment but also more interest paid over the life of the loan.
- Calculate what you can afford each month, and don’t overextend. Defaulting on a loan isn’t good for your future credit score!
- Know your approximate credit score to give you an idea of what you qualify for.
Options to Check Out for Embroidery Machine Financing
From traditional financing to nontraditional financing, here are some places to look when purchasing your next embroidery machine.
Some require a long credit history and good credit, while others are more understanding to embroiderers with bad credit or no credit history.
I’ve started with the more popular options available to users with good credit and then moved onto the more creative options for those who don’t qualify for traditional financing.
1. Dealer-Offered Financing + Other Dealer Agreements
Many embroidery machine dealers and authorized retailers offer multiple financing options for qualified purchasers.
These are usually 12-60 month terms with low-interest rates and no (or low) down payment for embroiderers with good credit history.
As such, these are one of the easiest and best options to pursue if you qualify. (However, these are not easy to qualify for with below-average credit.)
But, before rushing out to sign the first agreement, shop around!
For example, I saved $1000 on my last embroidery machine by comparing prices among dealers in a 25-mile radius, and while it wasn’t the usual dealer I purchased from, that $1000 was important to keep in my pocket.
And, as prices can vary between dealers, so can financing deals.
Check the required downpayment and also expected financing rates for your credit situation, and pick the best!
I’ve also seen dealers do embroidery machine rent-to-own options where you can bring home the machine and pay a monthly fee to own it.
However, if you can’t continue paying, you just return the machine. You lose the money you’ve invested in paying it off, but you don’t default on a loan and ruin your credit.
And, while you can talk with local dealers, big brands with an online presence are also viable financing options.
For example, Ken’s Sewing Center, AllBrands, and Sewing Machines Plus have financing options where you can apply from the comfort of your couch and get a quick response. (These are currently through Synchrony Financial rather than the business.)
2. Brand-Offered Financing
Certain brands also offer financing through authorized dealers and directly through their own businesses.
Knowing which brands have promotions at any given time will save you a trip to the dealer to learn the terms.
For example, Brother offers financing on their higher-end embroidery machines with approved credit. Financing involves opening a special credit card.
The last flyer I saw in the mail from them was 0% APR for 60 months on purchases of more than $4,000 (not too shabby!)
Unfortunately, if you can’t make the payments, the APR for the card was a whopping 29.99%!
Other home embroidery brands like Husqvarna, Baby Lock, and Pfaff also offer financing. Often, these brands rely on Synchrony Bank or other similar players to provide loans rather than the brand acting as the bank.
3. Business Loans (Banks, Online Lending, SBA, or Microfinancing)
If you are a business owner, a business loan is another option for financing an expensive embroidery machine.
Business loans are not always easy to get without good credit, but banks and credit unions are some of the most popular lenders.
Bank options include those with national branches like Chase or Wells Fargo but also smaller local banks without a national presence.
If you don’t quite qualify for a bank or credit union loan, another option is online lenders.
Some of the best online lenders for business loans include options like OnDeck, Lendio, and BlueVine. Some of these lenders will accept business owners with credit scores in the 500s!
Lastly, if you’re new to business ownership, the U.S. Small Business Administration website has great information for Americans looking to request more funding for their small businesses.
The SBA is also helpful in that if you don’t qualify for a traditional business loan because of low credit or the bank perceiving you as risky; the SBA could guarantee said loan, encouraging banks and lenders to take a chance on you.
For individuals in economically-disadvantaged locations, micro-financing is one last option. Research microfinance institutions in your area and see if you qualify!
4. Credit Cards
Yikes, I know!
But, if you can’t find any other financing for your machine and are financially responsible, you can charge a portion on credit cards and pay it off over time.
I do not recommend assuming credit card debt or opening new credit cards when you don’t need to, but if your business depends on having an embroidery machine and you can’t find any other option at the time, well, this might be your only option.
Choose your credit card with the lowest interest rate, and charge the purchase on that card first.
And, absolutely do not overextend yourself here, as you don’t want to max out your credit cards and be unable to afford emergencies.
In the digital age, crowdfunding is a popular alternative financing option!
Whether you choose donation-based crowdfunding (think GoFundMe) where people donate with no promise of a getting anything material out of it or reward-based crowdfunding (think Kickstarter) where people get something from you, this is another option to try.
If doing rewards-based crowdfunding, get creative!
For example, promise anyone who donates a certain amount to help you purchase a machine one free stitched project a month.
They win by not having to pay an embroiderer, and you win because you get the finances to purchase your machine sooner!
6. Friends or Family
There’s nothing that sours quicker than mixing friends or family and money lending, but if you can’t get loans the traditional way, this is a consideration if you have people you can trust who also trust you financially.
For example, my aunt and uncle “bought out” my husband’s and my 7% interest doctoral loans after paying on them for years and not making much headway in paying off anything other than the outrageous interest.
We instead ended up paying my family 3% interest on the loan amount.
It was super awkward owing family and having them know the details of our disgusting pile of debt, but we saved over $30,000 in interest, and we had a solid contract protecting both parties.
Overall, it was worth it to get out from under the crushing weight of debt MUCH sooner.
7. Leasing or Renting an Embroidery Machine
I wrote an entire post on where to rent an embroidery machine, which covers several free options for using machines!
If you can find a location that allows you to rent, this can be a viable option for embroiderers not ready to make the jump to machine ownership quite yet.
Just started your business and have only one or two orders a week? This might be a perfect option to get some cash in before you turn around and send it all back to purchase a machine!
Financing an embroidery machine isn’t for everyone–you run the risk of overextending and defaulting on a loan or paying thousands in interest.
However, financing can also put off payments so you can reinvest more money upfront in your embroidery business.
And, it gives embroiderers a chance to purchase a machine before they can save up the entire payment–hello, quicker cash flow!
Just don’t make the decision lightly, and always know what you’re getting yourself into before signing that dotted line.