getting a loan for new equipment

Discussion in 'Business Operations' started by swing blade, Aug 24, 2002.

  1. swing blade

    swing blade LawnSite Member
    Posts: 123

    Alright, I am getting the run around. I am 19 years old and want to start into lawncare. I found the equipment that i want to buy, and i applied for an small business loan. The problem is that the loan amount is too small, 5000, and they want me to use a personal loan that is backed with the full 5000 from a callable cd. I am slightly confused, because if the cd is callable, then why wouldn't I just simply cash it out and use it to cover my expenses. I am not doing this because that money was for college, and I cannot use it for anything else. So the question is: where do I go and what Do I do to get the funding i need?????
  2. gene gls

    gene gls LawnSite Gold Member
    Posts: 3,213

    Most dealers have loaning instatuions that they use. Some manufactures have programs available.

  3. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    to get the funding you need to get a job

    i'm not joking, hook up with a LCO for a season or two, learn as much as you can and then start up with less debt. Interest sucks.

    with patience, you'll be better off.
  4. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    Your CD is collateral in case you default on the loan. You could loan yourself the money and pay it back if you wanted to save paying the bank the interest. But if you can't touch the CD - then use it as collateral for the new loan and pay the loan off as quickly as possible (less than 6 months). You'll build credit as well for doing this.

    If you haven't been in the business before and you're new to the industry - as mentioned, try working for someone else first to see if this is what you want to do with your money.
  5. grassguy_

    grassguy_ LawnSite Senior Member
    from Ohio
    Posts: 633

    Well without knowing "the rest of the story", its hard to make a correct decision for you, like do you have enough accounts to get a good start now? Is this a plan for next season? Do you have a current job that handles winter income or some form of cash flow for at least 4 months? IF your plan is to go into business yourself then is the college plans on hold or out? Are you strictly getting into maintenance or are you going to do applications, landscaping, etc?. Whatever the case may be what i can tell you is that banks and credit unions alike are crying to make loans, and the rates are virtually at robbery levels. The rates won't fall any lower, (lol, don't hold me to that), these rates now are lower than what your rates will be for that student loan for college right now too. Shop the loan out though, just like you would for equipment. Most are still going to hold some form of collateral whether its the equipment, some personal collateral, or even someone to co-sign. Another thing to remember, though your mind might be set for the equipment you want, shop, shop, and shop now through the winter if your start up is in spring. With this economy the equipment will go for pennies on the dollar with those getting out of this business or manufacturers with huge inventories. Good Luck!
  6. swing blade

    swing blade LawnSite Member
    Posts: 123

    i am planning for next season. I have been in the business for 5 years now, and have not been worried about getting all the equipment since i didn't know what I was going to do from year to year. I have a job with an Lco, but the pay sucks, and I am more qualified in the field than my foreman, but they will not let me do anything but entry level work. Everything that they do I already have expierience in. I am in oklahoma city, and I called 25 different LCO's and nobody was interested in picking me up as an employee. the pay is 6.50 per hour with about 40 hours a week.
  7. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    wow,come here and even with the exchange you would make more and have your choice of LCOs

    have you talked to your boss about more pay and responsibility?

    if you are set on going on your own, try to stay out of debt as much as possible. with fast expansion debt is necessary but if you are willing to grow slow maybe try and save a bit as you go along. if you live at home, can you stay there a couple years while you start up? would make it easier
  8. smithf36

    smithf36 LawnSite Member
    from Indiana
    Posts: 61

    I got my 1st car loans with a co-signer. You may try that route or the manufactures deals. I haven't had any trouble getting a personal loan from the bank. Obviosly, you don't want to tell them it's for business. The rates are always better on the personal side anyway.

    One thing that I learned the hardway - Don't try to be everything to everyone, unless you use a lot of subs. I bought so much equipment, etc. that I hardly ever used, just because I thought I'd use it and there was a market for it. Stay simple and as debt free as possible. Stay profitable, learn your numbers, and stick with a plan.


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