financing question

Discussion in 'Starting a Lawn Care Business' started by Detroitdan, Apr 1, 2008.

  1. Detroitdan

    Detroitdan LawnSite Member
    Posts: 75

    Thinking about buying a new mower. I started part time summer before last, I got a Yard Card and bought a used walk-behind. I only mow one, sometimes two days a week, so it's been enough. I'd like to pick up some more work this year, but I don't want to unless I can get a zero turn. Found what Iwant yesterday, called up my Yard Card account and asked if I could increase it by$6000 and they said no, only gave me $2000. Didn't really want to use that account anyway, would rather get a loan from my credit union, but I was curious if they'd give it to me. Now I'm worried I'm not going to be able to get the money.
    I have a personal and a business account at my new credit union, personally I'm pretty maxed out. The business acount has just been so I can deposit mowing and plowing checks. Do you think I could go in and borrow money on my business account, totally seperate from the personal account? When I had both accounts at a local bank it seems like they were always trying to loan me money for the business.
    As a side note, I left that bank because they were so expensive, closed my accounts and went to the credit union. Now it seems that they did not in fact close my accounts, after telling me they did, and are chasing me for money I don't owe them, just tons of fees for having no money in the accounts AFTER I closed them. So recently they told me they are sending negative reports to the credit bureau, so I don't even know how far my credit score may have dropped. Maybe that's why I couldn't increase my limit on Yard Card from 4 to 10? Last year my credit was great, this is all their fault but they are able to kill my credit. Man I am frustrated!
    Anyway, sorry about the rant. My question is, any suggestions on where to get the money for a piece of equipment for a business?
     
  2. Tim Johnson

    Tim Johnson LawnSite Member
    Posts: 135

    The only way to find out is to go and apply for a loan. Most banks want 3 years or more of years in business. You can always get a loan thru sheffield, they give money to everybody interest rates can be high, but they always have special going on.
     
  3. sky_lawncare

    sky_lawncare LawnSite Member
    Posts: 26

    I've learned this the hard way so many times. Debt is bad. Debt is risky.

    If I can help it at all I do everything cash.

    You pay SOOOO much more for everything you finance, and in some cases end up upside down in your loan as your asset depreciates.

    As far as risk, if anything happened to your income stream it may affect your ability to repay. Think about it, if you pay cash theres monthly payment beating down your mailbox!

    It's far better to work harder, wait longer if you have to, and buy everything out-right. You will be much richer in the long run.

    I've taken a vow to stop making banks rich. It's a paradigm shift that seems to come from age and experience. I urge you to adopt it as well.

    Instead of mowing a couple lawns a week, double that, and buy your zero turn cash.
     
  4. TexasFire221

    TexasFire221 LawnSite Senior Member
    from Texas
    Posts: 479

    Sheffield has high intrest and they will probably want half down. I went in the bank and asked for $6000 and got it. Three weeks later went in a asked for $8000 more and once again got it. I didnt think my credit was all that great but something was right I guess. The bank will usually give you better intrest rates than some place like Sheffield.
     
  5. DA Quality Lawn & YS

    DA Quality Lawn & YS LawnSite Fanatic
    Posts: 8,919

    Per above, definitely agreed. Do you want to be the master or the slave of your business?
     
  6. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    On the other hand you can just take out a loan, then when it fails and you're left with a liability your parents won't have the money to bail you out because they're fixin' to be as broke as the rest of us so then maybe you'll be ready to step down off your high fallootin' horse and start becoming a bit more reasonable concerning hourly wages and salaries as it concerns if you were to work for someone else, yup, dang straight.

    Or, you can do it the hard way and stop counting on everyone else's money, that is, save it up and then buy used, cash.
    Oh yeah and stop thinking Ztr's too, foo', who you think you is come up around here you gonna RIDE in comfort while working?
    You're a funny guy, you could watch the news to see how things are or you could take the short cut and start thinking run-down walk behind and sweat, dirt and sweat and hard manual labor, and lots of it.

    But, the choice is yours.
     
  7. Detroitdan

    Detroitdan LawnSite Member
    Posts: 75

    Wow, thanks for all the incredibly off-base and unrealistic responses.
    Tim and Greenskeeper, thanks for taking my question seriously and answering it, without going off on a wild tear about debt, and my parents, and whatever else some people were talking about.

    To clarify, I don't have $6000 in cash to buy the machine. I can't do the extra work with my old WB to get the $6000. If I can borrow $6000 and make more than my payment will be, then that's how it's going to be. That's how many, if not most do it. If you can pay for your equipment in cash, good for you. I have paid for a lot of my equipment in cash, but not something this big. Can't do it. So why tell me not to borrow? You aren't going to have to make my payment. And I won't be asking my parents for money, I am 40 years old and I support my 70 y/o widowed mother in addition to raising a family.
    I checked with Sheffield just for S&Gs. I'm going to go to the Credit Union today and ask.
     
  8. Detroitdan

    Detroitdan LawnSite Member
    Posts: 75

    I see you've almost reached 10,000 posts. Are they all rants like this? How am I on a high falutin' horse? Were you drunk when you wrote this? Or is it heavily disguised sarcasm. I don't get it.
    Has no one in this business ever financed a new machine? I mean, I started with an old used WB, and a used trailer, and my truck is 11 years old. Heck, even my string trimmer is used. Lot's of guys out there finance 40,000 dollar 1 ton dumptrucks with plows and enclosed trailers full of new riders. Not where I'm heading. I just want to add a better mower on my used and paid for trailer behind my used and paid for truck, so I can feel more secure taking on some additional work.
    WTF, dude, can you relax?
     
  9. Paulup

    Paulup LawnSite Senior Member
    Posts: 270

    First off, these guys are just trying to help, and share their experiences in the business. Lawn care goes up and down, one day you might have 40 clients, and the next week you can have 15. Building debt around what you have or plan to have in the future can come back to bite you in the ass, and these guys are just trying to prepare you for that so you don't make the mistakes that some of them have made in the past.

    On to your topic, i was in the same boat last week, needed solid equipment and I couldn't earn enough to buy it without having the equipment. Went to the local John Deere dealer, and they set me up with a JD717A for 6k, 36 months interest free financing. If you really want to get into a good zero turn, and have to borrow money to do it, I'd recommend heading to your local JD dealer and seeing if they can help you out.
     
  10. Redbeard

    Redbeard LawnSite Member
    from TX
    Posts: 10

    Cash is no doubt the best option and I'm sure their are many who have been caught with their pants down by not following this advice. The risks must definately be evaluated. That is why it is necessary to have a good business plan established before assuming debt. With that said, their are 1000's of small businnesses that would not have been established without some type of small business loan.

    I to am in a similiar situation to yours. I just added a ZTR from Exmark. Thankfully I qualified for their 1.9% financing.

    Best of luck in your endeavor.
     

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