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POPO4995
01-04-2013, 07:45 AM
I want to do some debt consolidation and wondering what avenue would be the best to go down, business loan or business line of credit? Another question I have is can you consolidate vehicle loans into either or do you have to keep them seperate? Any insight to either one or both would be appreciated. I'm going to start calling banks to talk to them but I figured this would be a good place to start! Thanks for any input guys!

ELS Landscape
01-04-2013, 07:51 AM
First of all it kind of depends on the loan but most of the time consolidation is allowed. Problem is getting the loan from a bank.

If you are serious about this I strongly suggest you got to the score office and get their run around on a business plan then get an introduction to a specialty banker that does SBA loans. If you have any questions go to the SBA website.

wbw
01-04-2013, 06:58 PM
My limited experience has been that the banks like to keep your vehicle loans seperate.

ELS Landscape
01-04-2013, 07:40 PM
WBW, I agree that it is easier for them to track the asset/loan but not a deal killer if you have good credit.
You can also look at fleet lending/leasing.


There are also advantages to the buyer to keep them seperate as well.

snomaha
01-05-2013, 09:08 AM
I want to do some debt consolidation and wondering what avenue would be the best to go down, business loan or business line of credit? Another question I have is can you consolidate vehicle loans into either or do you have to keep them seperate? Any insight to either one or both would be appreciated. I'm going to start calling banks to talk to them but I figured this would be a good place to start! Thanks for any input guys!

Line of credit is used as a bridge during busy times - large payrolls due to the busy season but you haven't collected A/R yet would be an example. Banks like to see a loc at a zero balance at least once a year.

If you have enough equity in the vehicles and good credit it should be no problem to consolidate.

Efficiency
01-05-2013, 02:23 PM
Vehicles dont belong on LOC. won't ever be able to get a bank to do that deal. Doubt you will find a bank to consolidate your debt.
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djagusch
01-05-2013, 02:47 PM
Vehicles dont belong on LOC. won't ever be able to get a bank to do that deal. Doubt you will find a bank to consolidate your debt.
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Under a buisness loan if he has enough assets they could consolidate the debt, even vehicles. Just need enough assets for them to hold. I've done this in the past and may do it in the future. The key thing is to build relationships with bankers over the years.
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djagusch
01-05-2013, 02:58 PM
Vehicles dont belong on LOC. won't ever be able to get a bank to do that deal. Doubt you will find a bank to consolidate your debt.
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Also why not a vehicle on a loc? I would think they wouldn't have a issue if you are planning of paying it off 6 months or less.
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wbw
01-05-2013, 08:18 PM
Back in the days when I had a large enough line of credt to purchase vehicles with it my banker always wanted to do separate loans for them. It is almost like the vehicle loans don't count since they are secured. I have always used unsecured lines of credit and of course banks like secured loans.
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ELS Landscape
01-05-2013, 08:36 PM
I could be wrong but Efficiency said vehicles do not belong on an LOC which is to say they can not be put there directly or indirectly.

Bottom line is borrowing is hard these days and getting credit when you need to "consolidate" is tough unless you have other real assets and the old mower or truck is not going to get it from a "bank".

grandview (2006)
01-05-2013, 08:57 PM
You may be able to do a line of credit or business loan. Tell them your going to pay the truck off with the money and they can use it as collateral

Efficiency
01-05-2013, 09:54 PM
You need to marry the life of the asset financed to the life of the financing. Short term LOC is for short term needs (not long livec assets) ie payroll, COGS, inventory. You almost always have to zero your LOC each year and that would be tough to do if you neef long term financing for a truck for example. If you qualify for a revolver (i dont btw), this whole post is moot but then.

cpllawncare
01-06-2013, 02:18 AM
I got a SBA LOC just as you say for the lean months, like now LOL! I'll pay it back by mid season though. It took me 6 months to get it approved the SBA is VERY SLOW!

GreenI.A.
01-06-2013, 03:26 AM
We utilize a LOC as well, I keep my vehicle loans and large equipment loans seperate simply because these have a much lower interest rate than a line of credit. From what my loan manager told me is that if you default it is much easier for them to reposes your vehicle on a auto loan than it is for them to seize a vehicle used as collateral on a LOC. Seizing collateral is more like a forclosure process and not as quick and simple as a repo. Thus they charge a higher interest rate.