What type of needle and embroidery thread is used. Having trouble with the thread bunching up. Any info would be great, trying something new!

Sharp-using a 75/11

very loose on the bobbin and tight on the top, to get it to work with out looping or very few loops the bottom of the strap you can just about see all the bobbin thread. This was the only way that I could get it to work! This is doing it vertically on the strap.

Horizontally you can have a slight bit more tension on the bobbin.

The lettering I have been doing ranges from 1"-.5 inch with .25 underlay and 105% density and 10-20% pull.

 

Patch I copied this from my notes.  I haven't actually done this, but I saved it for when I do try to tackle this project.

Hope this helps!