Leveraging Equipment

[MJ Services]

how many small LCO's here prefer to leverage equipment vs paying cash or financing thru a dealer? In other words, would you rather use your personal $, your company's $, or somebody else's $

[TruSomethingOrOther]

Depends on the tool, and the urgency of it's purchase. It also depends on the maturity of said business. I have no shame acquiring a tool I need in almost any way.

[JB1]

I'm looking at a new tractor and I'll use the companies zero percent. It works for me
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[205mx]

Someone else's money? How does that work?
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[hackitdown]

I bought a new mower last year using 0% financing for 3 years. I usually pay cash or use a charge card, but this was too easy. I sold my oldest mower, and used the cash to buy an aerator and blower. So I guess this is an example of using "other people's money".

When I was new to this work, and didn't have many customers, I paid cash and bought new in order to play it safe. Then when I felt more knowledgeable about equipment, I started buying used equipment with cash, and figured I could fix stuff if it was unreliable. Now that I have a pretty steady business going, it just seems easier to buy new, and take advantage of the cheap loans.

[205mx]

But you still pay for the mower. It's not like you got it for christmas
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[MJ Services]

Originally Posted by 205mx

But you still pay for the mower. It's not like you got it for christmas
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well of course you still pay for it. but using the banks $ is pretty cheap right now and by using a line of credit, you can most times just pay on the interest and not pay any principal for the life of the loan, until the end at least. so yes, you still pay for it, but you kick the can down the road a few years, pay a cheap interest payment in the short term and generate a larger cash flow in the early years. I personally don't like doing this, but it's very logical.

[Bunton Guy]

"kicking the can down the road" sounds like your setting yourself up for failure. Gotta remember these days a steady flow of work can be as temporary as the next rain storm.

Only thing guaranteed is that nothing is guaranteed at all. 0% intrest is great but I wouldn't do anything that deffered payments down the road when the equipment is past its half life and its ready to be replaced.

[Cat 320D LRR]

i financed my new mower this year with no payments till next year mainly so i could save cash up incase we have a bad winter with little snow but after winter im gonna pay it off

[cpllawncare]

We do the same thing buy new at zero interest cash flow increases each year we've been in business, it's called managing risk, and managing and growing your business, very few people can grow a business on a cash only basis, and it's actually not smart anyway.