Cash, Finance, or Loan

Discussion in 'Business Operations' started by JCee, Mar 22, 2006.

  1. JCee

    JCee LawnSite Member
    from NY
    Posts: 113

    Looking to put about $10-12,000 into the business.

    If I could feasibly do it, is it better to pay cash, finance the machine, or get a small business loan? What are the pros and cons......
     
  2. gce_ent

    gce_ent LawnSite Member
    from Texas
    Posts: 93

    Personally... I would pay cash. Most lenders would charge a horrible interest rate for a Cash loan of that size. I have a Commercial Lending company and see it all the time no matter what the credit is like. I have done some receivable lending where a company takes possession of your weekly/bi-w/monthly receivables and then pays you after they take their share. I would not go this route personally either because I do not like someone having their say before I have mine. SBA are low interest but just a pain in the arse to finalize. I have seen some get 500k quick and I have seen some get drug out on 25k. Either way it is such a small amount I would pay cash. I set a limit for myself. If it below that limit I pay cash and if above I get my wifes approval :rolleyes: and then I finance.
     
  3. JCee

    JCee LawnSite Member
    from NY
    Posts: 113

    Ha, Thanks
     
  4. JJLandscapes

    JJLandscapes LawnSite Senior Member
    Posts: 682


    Pay in cash or finance if there is any 0% INT promotions and pay off within that time is a good idea.... ( If its no interest for 12 months then make 12 big payments and pay it off)

    since u sound like u have the cash but might be hesitant to spend 10 grand at once even though u can afford it
     
  5. gqnine44

    gqnine44 LawnSite Senior Member
    Posts: 501

    Cash! I didnt even read any more than the title. That is the answer!
     
  6. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Pay Cash .... WHY ??? Really Why would one pay cash if ...n this is the if .... you can get it on a credit card or have Sheffield loan it

    HOW does one expect to get good credit if you don't use credit ??? How you ever think your gonna get a bank loan let alone an SBA loan .... I just got an SBA loan this year .... it was like buying a house ...but I got the loan not really fore financial need BUT because I am developing my business into a sell-able commodity .... when I sell my business .... ALL the equip is paid fore .... I have established clients with cash flow going back 10 years ...n that this year ....when I sell in maybe another 10 .... I'll have 20 years of financial records .... the Inc will n does have good credit

    Cash ...ya I bought a Dixie out right last summer .... like $9800 n ya 2 years earlier a new Walker with $10k ... but I can afford it ... I'm established have good credit .... so if I need quick $$ in a pinch I have it .... my credit percentage it 7.9% .... so on $10k I'm paying bout $800 per year to use their $10k n I'm building credit as well as having an additional tax write off
     
  7. gce_ent

    gce_ent LawnSite Member
    from Texas
    Posts: 93

    If the goal was to establish credit then the question would never have been brought up.

    10k Financed does more harm to credit than good from what I have seen many times. Large loans with good payment history does very good for your credit.
     
  8. M RASCOE&SONS

    M RASCOE&SONS LawnSite Bronze Member
    Posts: 1,475

    IMO if it was for say a lawn mower ,i would look into see if they are doing any premotions like no payments until such and such a time or maybe they are running a special on a machine for 0% .when i have too spend more than $5000 i finance and its only because i dont want to tie up my money ,and that way what ever i buy can pay for itself..if your just starting out i would go with the cash method that way your not married too the bank while you get established ..good luck
     

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