10-11-2012, 08:38 PM
LawnSite Silver Member
Join Date: Feb 2011
Location: LI NY
You are confusing need with want.
Originally Posted by phillie
No doubt! I have been paying cash for the 3 yrs I have been in business. This winter I need to add another truck with plow and vbox spreader, dump trailer, 2 60'' mowers, a 36", a 21", blowers, trimmers, etc. I have landed a bunch of commercial accounts which will pay off this winter and next year but not until then. There is no way I could pay cash for all of this equipment and still pay bills and keep up and running.
You do not need to grow that fast. You chose to grow that fast.
Truely wish you well.
Another point of view most people here are on there 1 truck 1 crew. This 1 truck and 1 crew has to shoulder the burden alone to generate the income to expand to the 2nd truck/crew.
Taking a big risk.
Now having 10 trucks/crews going into debt to add that 11th truck/crew the risk is spread out.
Now a small risk.
Why spend your cash when you can get 0% loan?
Get a loan when if you lose 5% of your business you won't be able to make payments is not smart.
Get a loan and if you lose 20% of your business you can still pay the loan with no problem makes sense if your need to make a purchase and can't wait to pay cash.
People forget when Donald Trump was going bankrupt it was the time he was getting a divorce from wife 1#. He had a yacht. He stopped paying the loan. I think the boat loan was for 27 million. Point was Trump told the bank that he not only was defaulting on the loan he was no longer keeping the insurance on the boat.
You what the bank did?
They paid the insurance premiums on the yacht till the boat got sold. Trump was so deep into the banks he bent them over.
We are not in Trump's league. We get in trouble the banks are going to bend us and not even use any lube.
Many have started their lawn business for many reasons. One is I got tired of getting laid off.
Well you mess up with debt you will be laying yourself off.