financing equipment. is it wrong?

Discussion in 'Lawn Mowing' started by jarroo's lawncare, Aug 31, 2006.

  1. grass_cuttin_fool

    grass_cuttin_fool LawnSite Gold Member
    Posts: 3,503

    !st thing is too not get in debt to far to quick and not buy more than you need. My accountant told me that a little debt is ok. Even if you have the money in the bank or invested. Too sum it up, intrest is a tax deduction,If you dont have many deductions for the buisness, then a loan is very good. Once Uncle sam gets your tax money its gone. With the loan you have something to deduct and maybe get back something from uncle sam.

    wayne
     
  2. Tharrell

    Tharrell LawnSite Silver Member
    Posts: 2,964

    Compound interest is the 8th wonder of the world. It either works for you or against you. You can't pull money out of thin air so, do what you have to do to get started or expand your business until you can manipulate money and interest to your advantage.
    Debt free is an admirable goal but it may hold you back. Decide if that is acceptable or not.
    Remember though, the debtor is slave to the lender.
     
  3. dlm17

    dlm17 LawnSite Member
    Posts: 102

    ask yourself if you need the equipment, will it cut your time or allow you to do more or replacing unreliable equipment if so then financing is not an issue it will pay for it self, look at your cash flow if you take large amounts of your reserve it can set you up for problems later allways go for the lowest payment then if you can overpay on your payments it does the same as lowering your interest rate but gives you a cusion in case of slow times im not a financial expert but its worked for me for 16 yrs
     
  4. bigjeeping

    bigjeeping LawnSite Senior Member
    Posts: 903

    There should be only one man on this board who doesn't believe in financing.. a muslim. Otherwise we are all business owners and should know that start-up capital isn't always handed down from ma and pa's estate. Starting a new business almost always goes hand in hand with financing, loans, etc.
     
  5. guven

    guven LawnSite Member
    Posts: 205

    I beileve financing is good if the rate is not very high, I want to buy scag ztr in spring with finance, I have the money but I do not want to put all my money in one mower, I am going to finance it, bye the way I am afraid of debt but what can I do, afraid afraid I got nothing.
    thanks
     
  6. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    It really depends...I personally took 3 years to pay off my 04' Lazer b/c my money was going elsewhere. IN those 3 years I bought Trucks, a plow, New trimmers, Blowers, Advertisning, Hired employees, etc. If I didn't grow sure I could have paid it off in a few months, but when your growing you need financing so that you can use your money elsewhere. Today I could probably pay cash for a new machine If I really needed one. it all depends on what you goals/motives are. Esp. if you have a family & home you mnay not have the cash just to oay everything off in one year. Mortgage, kids, new truck mowers etc., you might have to take a few years to pay off just to keep you cash flow free for other bills.
     
  7. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    I want you to do this... Continue making payments, get yourself a financial advisor and have him set you up a retirement/investment account where you can withdraw money (you will have to pay taxes if you do) from the account if you need it. This way you get a double dip on your money. You get to spread out your tax deductable mower payments over several years possibly lowering your tax bracket in future years and you get to deduct the money you are putting away for retirement now.

    The only thing you will accomplish by paying off the mower in one big lump sum is a one time deduction. The little bit of interest you are paying on the loan is nothing compared to the payoff your investment will make later.
     
  8. noseha

    noseha LawnSite Senior Member
    from MI
    Posts: 554

    yardcard 6mos same as cash with 1.9%. I have only made payment on mowers (2) pay cash for all other
     
  9. ProStreetCamaro

    ProStreetCamaro LawnSite Platinum Member
    Posts: 4,121

    We financed our M48 Tank with 0% intrest for 3 years. every penny we pay in goes toward the balance. Its hard to beat that deal!
     
  10. TJLANDS

    TJLANDS LawnSite Bronze Member
    Posts: 1,669

    Bad advice, debt is part of business especially small business. Most if not all people cannot start a business without debt and surly could not grow and survive without it.
     

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