wait to pay in cash or get equipment on credit?

Discussion in 'Lawn Mowing' started by greenL, Feb 11, 2008.

  1. greenL

    greenL LawnSite Member
    Posts: 12

    Hey everyone new to this site however it is very interesting, anyways to the point. Im looking around at everybodies pictures and it looks like most of you guys are driving all of these HD trucks and nice big trailers with real nice expensive equipment and im just curious as to what you guys on average are paying in monthly payments, because im getting new equipment and im just wondering how much i could afford to get.
     
  2. Mowinforaliving

    Mowinforaliving LawnSite Bronze Member
    Posts: 1,258

    $24,000 revolving credit line through Yard Card, minimum payment is around $450 a month. As you pay it down it frees up the line just like a credit card. For example: If you max it out to buy a couple of commercial mowers and pay off $9,000 of it, you could take the card and go charge up $9,000 again. Just like a Visa or Master Card. There's other places like Sheffield Finance, etc... but I don't know what their payments are. I tried them and couldn't get approved, but Yard Card would. The catch is that their interest rates are higher.
     
  3. Mowinforaliving

    Mowinforaliving LawnSite Bronze Member
    Posts: 1,258

    A guy told me one time at Fowler Dodge in OKC when I bought my truck that the standard rule of thumb is $20 for every $1,000 that you finance. Again, that's just the rule of thumb. It varies depending on the creditor, how many months the note is going to span, credit score, etc... I financed $42,000 on my 07' Dodge last year and my payments are $715 a month.
     
  4. Mowinforaliving

    Mowinforaliving LawnSite Bronze Member
    Posts: 1,258

    75 month note
     
  5. Big C

    Big C LawnSite Bronze Member
    Posts: 1,642

    Pay cash for as much as you can....thats what I did all my equipment & trailer is paid for cash..they may not be "top of the line" but they are mine and they are paid for....my new truck that I just purchased is financed and is a personal vehicle that I will use for my part time business and not to mention i have a full time job that pays all my household bills so I am doing this lawn thing for the enjoyment and extra cash....not for the stress!!!! If things get slow with the lawn business I will just put my toys away and wait for things to get better.
     
  6. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    The question is, how many lawns a month do you want to cut for free?
    Because that's what you'll be doing if you're dealing with interest charges.
    Yup, every 30 or 35 dollars in interest is one lawn you get to cut for free.

    Oh and believe me, 60 and 70 a month in interest and banking and other fees is nothing.
    There's 2 for free right there but it's really more like 20 you'll have to cut before you come out ahead, profit wise.

    So do like I did and go cash only, then maybe it doesn't hurt any worse.
    Because I paid a few of those 60 and 70 dollar fees and I was trying hard not to, but at least that was it.
    I haven't paid a banking fee now in 2-3 years, and even when I did pay them it was only 2-3 maybe 4 months out of the year.
    And that WAS cash only, I really wasn't trying to pay these things.

    The other reason was peace of mind, I didn't have much but at least it was ALL mine.
    No matter what happened, make it through or go bust, no worries at least in this one section.

    So, Cash only, it's far better this way.
    Nothing ever comes easy, do it the hard way and suck it up then you come out better in the end.
     
  7. Mowinforaliving

    Mowinforaliving LawnSite Bronze Member
    Posts: 1,258

    I agree. Pay cash if you can. It also depends on how much of your income is already tied up too. Like me, I have no kids, no child support, no alimony, etc... My wife already owned our house when I met her, so we have no mortgage, etc... She works a full time job, even though my mowing brings in over a $100,000 a year, because she had been there forever and wants the pension, benefits, etc... If your circumstances are like mine then I would say yes, finance if you have to in order to get going. It's like the old saying "It takes money to make money and scared money makes no money". Just don't over do it. Buy what you need to operate professionaly and what you need to run your business. Put money in a Roth IRA or something like that too.
     
  8. Mowinforaliving

    Mowinforaliving LawnSite Bronze Member
    Posts: 1,258

    If you just don't have the cash to buy everything, then I would say finance if you can and have the clientel to justify it. You'll find in this business you can finance a $10,000 machine, a trailer, etc... and easily spend $20,000 to get going. However, in this business you can also easily make enough money in one mowing season to pay for the equipment 5 times over if you wanted to.
     
  9. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    I buck the cash trend here on everything but handheld equipment like blowers and trimmers. I don't mind paying the little bit of interest that lenders charge me to use their money. Borrowing money means you don't have to tie up all of your own money and worry whether or not you'll be able to save up $10,000 to buy that new mower by the time your old one is ready to be retired. All of the interest that you pay is deductable anyway.
     
  10. Mowinforaliving

    Mowinforaliving LawnSite Bronze Member
    Posts: 1,258

    Totally agree with you Richard
     

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