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Old 08-31-2009, 06:40 PM
rodbite rodbite is offline
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Join Date: Feb 2004
Location: Central Florida
Posts: 71
New financing options

I and a group of friends are researching the idea of a new Financing Company. We would specialize in Landscape, Lawn Care and Tree Service equipment. Our Financing would look more at the business and the business ownerís work/business history. We will not rely only on a customerís credit file.


I would be grateful for any thoughts or advice, good or bad.

Rod
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Old 09-01-2009, 12:21 AM
mjealey mjealey is offline
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Join Date: Jul 2008
Location: Knoxville, TN
Posts: 475
I have worked in the finance industry and banking industry for a while now and that is what I do for a living during the day. You would be crazy not to pull credit. I don't care what people saym after the hundreds of credit reports I look at, they usually don't lie.

2. I am just going to be honest with you. Me and another business banker work with one of the biggest lawncare companies in East Tennessee and they have the operating capital to pay cash, but they do finance with us from time to time and we can get loans to go through for them. They are very well esatablished and have been around a long time. Still it is hard because they are in our industry, they are at the highest risk grade we lend to.

Keep this in mind. Our industry has the biggest turnover out there. Somebody comes in and we finance a $8,000 mower and they go mow. Do it for 1 summer and they are gone out of the business stuck with a mower they still owe on. 80-90% of the time this is what happends.

You don't have a bad idea, but it isn't as easy as you make it. Very Very Risky area to lend too. You would have to only lend to well established business with good credit to get going to build soe capital then you might be able to open up a little bit.
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