Register free!
Search
 
     

The Green Industry's Resource Center


Click for Weather
Reply
 
Thread Tools Display Modes
  #11  
Old 04-03-2010, 10:19 AM
zak406 zak406 is offline
LawnSite Bronze Member
 
Join Date: Jun 2006
Location: irwin pa
Posts: 1,505
Maybe try a local credit union
Reply With Quote
  #12  
Old 04-04-2010, 09:08 AM
mbrew mbrew is offline
LawnSite Senior Member
 
Join Date: Mar 2010
Location: Ft. Worth TX
Posts: 493
I'm going to jump in here with the folks that advise against using credit. When you buy on credit you have taken on a liability, and let risk enter your business model. I'd like you to take a minute and really think about the words liability and risk because most people don't. When you are in debt, you are working for and responsible to someone else, when you pay cash, you're working only for you and you are in control.

I'm just now thinking about entering this business (again) and I will follow my own advice if I do, but I also do personal financial counseling and I often see terrible problems cause by indebtedness. Many of these people were in great shape until some unexpected problem arose, then their liabilities became huge problems for them. To give an example: If you step in a hole and break your leg or are injured in a car accident and can't work, how would you service the debt?

The ability to delay your own gratification is a sign of maturity. Just some things to think about - and congratulations on the number of accounts that you've put together! You're off to a great start.

Mike
Reply With Quote
  #13  
Old 04-04-2010, 09:31 AM
MikeKle MikeKle is offline
LawnSite Platinum Member
 
Join Date: Oct 2007
Location: Northern KY
Posts: 4,255
IF you have been applying at lots of places, that will actually bring your score down a bit, they dont like to see alot of applying over a short amount of time, but I know what you are going thru, I had bad credit when I was younger and it is a b**ch to get a loan if you dont have a good score. You may want to try this though, apply for a loan at a credit union and if the mower you want cost $5000. apply for a loan of $9000. This might sound crazy, but what the credit union may do is look at your score and come back with a counter offer lower than the amount you requested, and chances are it will be in the neighborhood of what you wanted in the first place. Some credit unions will do this, and some do not, I know C&O does. It may work for you, and it may not, but you will probably need a co-signer if it doesnt.
Reply With Quote
  #14  
Old 04-04-2010, 09:33 AM
nepatsfan nepatsfan is offline
LawnSite Gold Member
 
Join Date: Sep 2004
Location: Franklin MA
Posts: 3,156
Quote:
Originally Posted by zak406 View Post
Maybe try a local credit union
Credit is a good thing to have in business. A lot of guys that say buy with cash are a 1 man operation that don't neccessarily understand the tax benefits of low rate finanancing and depreciating equipment. You cannot abuse it and don't spend beyond your means but it is good to have to expand and grow. Start off by going to stores....sears, target or something like that. Get a credit card. Make small purchases and pay them off on time in full every month. It isn't an easy process but once you build good credit for 6 months to a year the offers will start coming in from everywhere. I am not saying you should finance everything but it is not a bad idea to build good credit and finance stuff you can afford at low rates. It also helps to keep working capital in your business account so you will have money for unforseen and incidentals. Most large businesses use finanacing as a way to grow their businesses. (all your major retail, restaraunts, basically everyone) You just have to be responsible, most of the stuff I finance, I get 0% on. I would be downright stupid not to take a 0% financing offer. Anything under 5 % for a piece of equipment is worth it to me. I can see some benefits of buying stuff outright. If you are not responsible with money or you don't have the work to support it. All my bills are paid on time every month and I always get the best rates on financing. I am debating right now whether to take 0% from cat for 48 months on a new skid steer. Works out around $1000 a month or buying one for 10-12 k outright used. Benefits to the 12k one....its paid for for a quarter of the price. Downsides....if it breaks and costs me 3k to fix. I have over a years worth of payments made on a brand new machine with a warranty. tax benefits...can depriciate the new machine for the life of the loan and its free finanancing. things to think about
Reply With Quote
  #15  
Old 04-04-2010, 10:13 AM
Richard Martin's Avatar
Richard Martin Richard Martin is offline
LawnSite Fanatic
 
Join Date: Mar 2000
Location: Greenville, NC
Posts: 14,490
Quote:
Originally Posted by mbrew View Post
When you buy on credit you have taken on a liability, and let risk enter your business model. I'd like you to take a minute and really think about the words liability and risk because most people don't. When you are in debt, you are working for and responsible to someone else, when you pay cash, you're working only for you and you are in control.

To give an example: If you step in a hole and break your leg or are injured in a car accident and can't work, how would you service the debt?
Risk is a part of everyday life. You live with it and manage it.

Your example of being in a car accident or breaking your leg is a poor one. Your whole premise is that the loan that you took out would be the only thing that isn't paid if you can't work. The chances are excellent that the $200 a month equipment loan that you took out will only account for a very small portion of your bills that won't get paid if you are incapacitated. Since you probably wouldn't be able to pay your electric bill, pay your rent or mortgage, buy food, buy gas or any of a hundred other things you pay for in a month maybe you shouldn't take on that risk too. We'll just eliminate all risk and sit in the corner and perish.

And the notion that we're working for someone else when we take out a loan is completely and utterly absurd.

A loan is a 2 way street. Risk is borne by both parties. If you don't pay the loan back you stand the risk that the item that you used to secure the loan will be repossed and there will be a red mark put on your credit record. That's about all that usually happens. The lender can sue you for any differences between the amount owed and what he can actually recover. You can easily get out of that by declaring bankruptcy. The lender would end up getting screwed. On the other hand the lender assesses the risk that you won't pay back the loan and he charges a fee (interest) to lend you the money based on his appraisal of your credit risk. If you don't pay the loan back he usually ends up getting screwed in some fashion.

Now the part about working for someone else....

You're going to pay for the item one way or the other. You can either pay for it before you buy it or you can pay for it after you buy it. You still end up with the item. Period. In most cases the huge majority of the money that you give to the lender is money that he lent you. You're just paying it back. You received an item and you're simply paying for it. It's just like as if you were to put money away once a month to save up to buy the item with cash. You do also pay a fee every month (interest) for the lender to assume the risk that you will pay the money back. It isn't like you borrowed money from a loan shark and he will come and break your legs if you don't pay it back.

You are NOT working for someone else. You still have a choice. If you don't pay it back it's not like you will be imprisoned or they will take your first born.
__________________
Serving Greenville, Winterville and Ayden NC




Last edited by Richard Martin; 04-04-2010 at 10:18 AM.
Reply With Quote
  #16  
Old 04-04-2010, 10:16 AM
topsites topsites is offline
LawnSite Fanatic
 
Join Date: Mar 2005
Location: Richmond Virginia
Posts: 21,677
Well, I remember them days...
Oh yes, yes, been there, done that.
More than once, way more

When I wanted... No, when I HAD to have something they said I could not get.
Who they were, these people who said that, the bankers, the parents, these business owners and grown ups,
dog gone it I said I had to have it.

And I would listen to the answers one after the other until!!!
I heard the one answer I was wanting to hear, somehow and oddly enough
failing to realize that ALL the rest of the answers were pointing to the same
thing, which is saying I really couldn't have it right this moment.

Long story short lets just say I made life a lot harder on myself.

Quote:
Originally Posted by ProSeasons View Post
You know what's cool about commercial lawn equipment? It's so friggin' tough that buying a USED unit is actually still a good investment. No warrenty or dealer support, you say?

Learn to WORK ON IT YOURSELF!
Dang straight!
I've been in business, this is my 9th year, and more than ever all I look at buying is USED!

The new stuff is so dang expensive *I* can't afford it.
I can get a loan, lickety split no co-signer or nothing, that's not the problem.
The problem is I don't got the money.
Plain and simple, I just don't got it.

Why I don't just let myself go, why I don't allow myself to forget rational thought
and simply follow my impulse, get the dang loan and have a new mower?

Why, I reckon after so many years of doing things the hard way, possibly after banging my hard head against
the wall how many times, maybe a soft spot did somehow develop and something finally must have sunk in.

Peace out

Last edited by topsites; 04-04-2010 at 10:23 AM.
Reply With Quote
  #17  
Old 04-04-2010, 10:26 AM
nepatsfan nepatsfan is offline
LawnSite Gold Member
 
Join Date: Sep 2004
Location: Franklin MA
Posts: 3,156
Quote:
Originally Posted by topsites View Post
Well, I remember them days...
Oh yes, yes, been there, done that.
More than once

When I wanted... No, when I HAD to have something they said I could not get.
Who they were, these people who said that, the bankers, the parents, these business owners and grown ups,
dog gone it I said I had to have it.

And I would listen to the answers one after the other until!!!
I heard the one answer I was wanting to hear, somehow and oddly enough
failing to realize that ALL the rest of the answers were pointing to the same
thing, which is saying I really couldn't have it right this moment.

Do you really have to know the conclusion?
Lets just say I made life a lot harder on myself.



Dang straight!
I've been in business, this is my 9th year, and more than ever all I look at buying is USED!

The new stuff is so dang expensive *I* can't afford it.
I can get a loan, lickety split no co-signer or nothing, that's not the problem.
The problem is I don't got the money.
Plain and simple, I just don't got it.

Why I don't just let myself go, why I don't allow myself to forget rational thought
and simply follow my impulse, get the dang loan and have a new mower?

Why, I reckon after so many years of doing things the hard way something finally must have sunk in.

Peace out
You obviously do not understand the benefits of depriciation. In a lot of instances you end up paying less for a new machine than for a used one. Between the tax break and maintenance, it is often times more beneficial to finance a new machine. I am definitely not opposed to buying used, I have bought many used things and will continue to, but to use a blanket statement on finanacing vs. paying cash is sort of ridiculous and is an uninformed answer. It is not that cut and dry and would depend on the equipment and also the finanace rate and variables like repair costs and what could go wrong. There is no right or wrong answer. The largest businesses in the world use financing. They don't all succeed but they make more than most us. Just something to think about. If you told me you had a 1 year old scag wild cat with 100 hours and no problems for 4k or a new one for 12k. I am going with the used. I will take that risk. There are a million variables.
Reply With Quote
  #18  
Old 04-04-2010, 10:29 AM
topsites topsites is offline
LawnSite Fanatic
 
Join Date: Mar 2005
Location: Richmond Virginia
Posts: 21,677
Quote:
Originally Posted by nepatsfan View Post
You obviously do not understand the benefits of depriciation.
My equipment depreciates all the same.

Last edited by topsites; 04-04-2010 at 10:37 AM.
Reply With Quote
  #19  
Old 04-04-2010, 11:07 AM
unkownfl's Avatar
unkownfl unkownfl is online now
LawnSite Gold Member
 
Join Date: Mar 2009
Location: Orlando/Windermere
Posts: 3,757
You need to seek a SBA packager. They will draw up everything for a SB grant or loan from uncle Sam.
__________________
Reply With Quote
  #20  
Old 04-04-2010, 11:24 AM
GrassIsGreenerLawnCare's Avatar
GrassIsGreenerLawnCare GrassIsGreenerLawnCare is offline
LawnSite Senior Member
 
Join Date: Mar 2010
Location: VA
Posts: 634
ya man...i would try to go into it without any debt if possible. It took me a few years to save up enough to start my business and i am 25. i just didnt want to jump into it with a bunch of monthly payments and not alot of customers lined up. so i saved until i knew i was ready. i bought 2 used walk behind with less than 200 hours a piece. bought all my groundworking equip new though. im starting out with a smaller trailer that i soon will be able to upgrade. but the best thing of all is that i dont "owe" anyone any money. if i lose....its my personal loss not anyone elses. this way i cant screw up my credit like i did when i was younger. the best way to start building your credit is to go to like Sears and kay jewlers and small places tht will give you $300 credit limits and buy things and PAY ON TIME. this way you can slowly establish some sort of credit. good luck
Reply With Quote
Reply

Tags
financing , lawns , mower , yards , zero turn

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 10:52 PM.

Page generated in 0.12620 seconds with 7 queries