Something in the world of floating have you stumped?
Recently, the float community has been introduced to some companies willing to lease float tanks for businesses. These are usually different from manufacturers and come with a small fee associated with it.
Graham and Ashkahn discuss the issues to consider when looking at these companies and in what situations they might be a viable alternative to purchasing tanks outright.
Stay tuned for information on how to reach our two hour call in show, November 29th at 3pm PST. And as always, feel free to send questions in the form above or directly at floattanksolutions.com/podcast.
Listen to Just the Audio
Transcription of this episode… (in case you prefer reading)
Graham: All right.
Graham: Hey everybody.
Ashkahn: Welcome Folks.
Graham: Yeah. …
Ashkahn: Just saunter on down.
Graham: Good to have you here, yeah. Take a seat.
Ashkahn: Yeah. Happy- I’m happy.
Graham: I’m Graham.
Ashkahn: Alright and today’s question is. …
Graham: You’re Ashkahn-
Ashkahn: It’s not usually how this goes,
Graham: You’re Ashkahn.
Ashkahn: So, before we get started-
Graham: You’re Ashkahn.
Ashkahn: We have an announcement and that’s what we’re about to make here.
Graham: You’re Ashkahn. You’re Ashkahn. Say that you’re Ashkahn. Tell the people who you are.
Ashkahn: I feel like they’ve picked it up at this point y’know-
Graham: He’s Ashkahn.
Ashkahn: My name’s Ashkahn and we should let you know that we have a special announcement.
Graham: Yeah, we should let you know that. And so we’re going to, we do, we have a special announcement for you.
We are going to be winding things down on the podcast. Wahhh-wahhh.
We have a whole episode we recorded talk- what?
Ashkahn: Yeah, you can keep goin’.
Graham: Okay, cool. Wahh, I’ll pick up from the wahh-wahh. Wahh-wahh it’s a good noise to make. But, we are doing a final last episode that is two hours long, it’s gonna be live so you can actually call in and talk to us. You can be making wah-wah noises live on air with us.
Ashkahn: Yeah, any wah-wahs we’ll put straight through.
Graham: And when is it, Ashkahn? When do people have the ability to get in here.
Ashkahn: Oh, it’s gonna be on November 28th at 3PM. … Is it not on November 28th? When?
Ashkahn: November- it’s gonna be on November 29th at 3PM Pacific time.
Graham: Yep, until five PM Pacific time.
Ashkahn: Don’t forget that date. Yeah.
Graham: Or 3PM Pacific time until 8PM Eastern time.
Ashkahn: Yeah. A good way to think about it.
Graham: Better that getting the entire day wrong, you know. So tune in it’ll be really fun. Come join us if you’re subscribed on the podcast or mailing list you’ll get invitations to sign up and get reminders and stuff like that. I also really want someone to call in and make a noise of their pump system when they call. So, if anyone out there has pump issues, and you wanna call in and have us solve them live on the air, it’s like a dream. That’s a dream of mine.
Ashkahn: It has been a dream- Graham’s been talking about it since we started this podcast.
Graham: It’s pretty much every episode before we launch like, “Maybe this will be the time.” And Ashkahn’s like “Nobody calls in, it can’t be the time.” Okay, anything else about our special- oh, we have a podcast about where we talk a lot more about the decision to kind of wind things down.
Ashkahn: Yeah. So listen to that.
Graham: You should go listen to it. It’s a special announcement, a few episodes before this.
Ashkahn: It’s a good one. Yeah.
Graham: Great. Yeah, I got a little teary-eyed thinkin’ about it. Okay-
Ashkahn: Alright, so our question for today.
Graham: Yeah. Our question is: “Is leasing pods a good idea?”
Ashkahn: Yeah. Yes.
Graham: I wanna say maybe.
Ashkahn: Yeah, I mean it’s a pretty good idea.
Graham: Well, I guess we should say when the question says “leasing” we’re assuming that means leasing to own kind of thing. Like you’re-
Ashkahn: Yeah, I don’t know of a lot of float tank rental services.
Graham: Yeah. I don’t know of any float tank rental services.
Ashkahn: Usually, there’s manufacturers that have worked with companies to finance their float tanks so you can pay them off, probably with some sort of down payment, I’m assuming, and then monthly payments with interest accruing.
Graham: Yeah, and then there are whole companies that are just dedicated to helping finance float tanks from any manufacturer that are out there, as well, and I don’t know too many people who have gone through those and I guess this gets into one of the down sides of potentially leasing a tank, even to own, is just there’s gonna be interest.
Ashkahn: Oh, sure.
Graham: Right, like no one’s gonna just let you lease the tank and in the end, when you pay the final payment, you have paid as much as the full retail price of a float tank, right. There’s gonna be-
Ashkahn: Yeah, they wouldn’t be in business for very long.
Graham: Yeah, there’s gonna be some amount of interest that you’re paying and what I’ve heard is for, at least a couple of the independent ones, the ones who we’ve talked to people who have actually tried to go through them. Those rates are kind of in the 17 to 20 percent sort of range of interest that you’re paying. Immediately off the bat, although it’s less money up front, it’s a more expensive option.
So in that sense, just the same as getting a bank loan, really, or anything like that.
Ashkahn: Paying 20 percent interest.
Ashkahn: What is that? Oh, there’s other things with interest, like how often it’s accruing and all that sort of stuff.
Graham: Yeah, so we’ll just say, and I have no idea what the details are, but really common is the 20 percent refers to the yearly rate and it accrues monthly. That’s kind of standard operation.
Ashkahn: So, here’s the scenario to me that I think it makes a lot of sense to lease float tanks. Which is, you don’t have enough money to build out your flow center the way that you know you should build out you float center.
Ashkahn: And, I mean, if you can get money other ways, like a bank loan or something and if you can get a cheaper interest rate, there’s math that makes things easier. So all the kind of very rational, logical, mathematical, I can get money for cheaper sort of arguments aside. Let’s assume you can’t get anymore money, you’ve gotten the biggest bank loan you can get or whatever, or you have all the personal finances you can. If you’re trying to find a place to save money, I’d way rather save money by not having to pay for the full amount of float tanks right off the bat and pay for that out of the income that my business will start to bring in. Versus cutting corners on my construction. Deciding to be like, “Oh, maybe we don’t need that extra level of soundproofing or maybe we can stop our waterproofing over here as opposed to going all the way around the walls.” That to me sounds like a way worse decision than paying the interest on leasing float tanks.
Graham: Yeah, yeah I agree. Another thing to keep in mind here is that if you lease tanks and don’t actually end up paying them off, you go out of business beforehand, you’re gonna be giving those float tanks back to the company you were leasing it from, or they’re going to reclaim them and resell them or you have to do some fancywork where you’re selling the tanks and then using the amount that you sold them for to pay off the remainder of your lease. Which is totally doable, you know, it just adds some complexity to shutting down your operations, I guess, and risks just making any money that you paid into your tanks a lost amount, if you’re not careful with it.
Ashkahn: Yeah, I mean float tanks are definitely an asset in the way that soundproof walls are not.
Graham: Yeah, right, and in the sense that if you’re selling your float tank center, great, your soundproof walls are probably an asset, the person buying them doesn’t have to build those walls, that’s awesome. But if your landlord doesn’t renew your lease, and you have to shut down and you’re kicked out because of that. You can’t take your walls with you, and in a lot of leases, it say even if you could take your walls they wouldn’t let you. Which is crazy.
So all of a sudden, if you’re trying to get money back on your business and now you can even sell your float tanks because those are being reclaimed. It just means the worst case scenario is you lost sort of everything, but you paid less money up front so you lost less than if you just had float tanks sitting around that you couldn’t sell … I don’t know, I guess really to me it all comes down to a little more complexity and more interest rates that you’re paying.
Ashkahn: Yeah. I mean I wouldn’t jump to it as my first solution, but it would be pretty high on my list of ways of saving money at the end of the day, during your build out.
Graham: Yeah, and again if this is a case where you’re just determined, you’re going to open a float center, you really don’t have the money unless you lease tanks, yeah. Go for it. For sure, I think it’s a great option out there.
Ashkahn: Yeah, ’cause then you have money coming in from those float tanks, hopefully, and you can use that to pay for something. I mean its just going to eat into the income your business is making over the beginning, but that’s money that is coming from somewhere, as opposed to having to be created out of nowhere.
Graham: I think you can probably make your own decision.
Ashkahn: I think for a lot of people it’s a very useful thing.
Graham: And I do, of the people who have gotten or looked into leasing, not from a manufacturer specifically, and I really truly don’t know what the rates are for manufacturers so, if you’re looking into certain tanks just ask the tank manufacturer if they have a financing option and kinda what the deals are there.
But, for people who went through other companies, I actually don’t know anyone who actually ended up going with a leasing company. They’d gone deep down looking into it and they just decided that the rates were too high, and the kind of defaulting options didn’t make sense. So I know. I think, three people who’ve kinda perused that and just did nothing with it so, if you’re out there and you actually went through a non-float tank, non-bank, kinda leasing company rather than a loan company, write in and let us know.
I’d love to hear about how that went for you and whether that’s a good relationship.
Graham: And otherwise we never leased our tanks. As usual, you probably shouldn’t be totally trusting our judgment on this since we’ve never gone through it ourselves.
Ashkahn: We’re still happy to talk about it.
Graham: Oh, yeah, we’ll talk about anything.
Ashkahn: Speak from a place of authority.
Graham: With very authoritative voices.
Sorry. Voices. There we go. Down at the end, not up.
Ashkahn: Alright, well, cool. Yeah. If you guys have other questions …
Graham: Kep ’em to yourself, y’know. Don’t bother us with them.
Ashkahn: There’s a whole website you can type it into that gets deleted right away. It’s floattanksolutions.com/podcast
Graham: And it’s getting down to the last few questions, so if you have something you’ve been storing up and haven’t asked us, now …
Ashkahn: This is it.
Graham: Now’s the time, now or never. Man.
Ashkahn: Yeah, so. Get on it.
Graham: By everyone.
Graham: Hopefully now.
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