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Owning your own business= good credit??

Discussion in 'Business Operations' started by Petr51488, Aug 24, 2005.

  1. Petr51488

    Petr51488 LawnSite Silver Member
    from NJ
    Messages: 2,377

    Alright. Being that i will be 18 soon, i will be legally allowed to have my own business. Here is my situation. I have 10,000 saved up ready to put down on a car. The thing is that the car cost 30,000. So.. i would need to finance 20,000. When they do a credit check, will the business owner get a better advantage? Being that i will be 18 i won't really have any credit. If they see that i own my own business will they loan me the money? BTW, i am fully capable of paying the 500.00 a month finance charges. Can anyone answer my question? - Peter
  2. justanotherlawnguy

    justanotherlawnguy LawnSite Bronze Member
    Messages: 1,282

    Sad to say, but being a business owner doesnt help your credit at all!!! Go out and get a dept store card or a gas card first, cause you probably wont be able to get a Visa/MC/amex/discover.

    You can have all the money you want in the bank and your credit will not be affected at all.

    On a positive note, a vehicle is a secured loan, so by putting down $10k that shows commitment on your part. Only trouble will be getting a good interest rate. If you get a new vehicle, some banks offer a first time buyer program.
  3. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Messages: 1,847

    how bout a lecture?

    an 18 year old does not need a 30k car. Take your 10k and invest it. Cars depreciate, investments appreciate.

    You may think you can cover your 500/month note, but how about the 400/month insurance that accompanies it? How do you plan to pay for your college education, you are getting one arent you?
  4. Brianslawn

    Brianslawn LawnSite Silver Member
    Messages: 2,004

    1. the money would be better spent on a truck or house unless your mom is letting you live for free till your 40.

    2. biz owners usually are more of a risk for credit, unless they are older and had biz for many years? do you have 2 years schedule c's? do you know what that is?
  5. Petr51488

    Petr51488 LawnSite Silver Member
    from NJ
    Messages: 2,377

    Yes, i am getting my college eduaction. My parents are paying for it. The deal is with me and my brothers, if i fail a class, i pay for it. Same thing with insurance. If i get one speeding ticket or any type my moving violation, i pay for my own insurance. Thanks for your concern though MacLawnCo
  6. Petr51488

    Petr51488 LawnSite Silver Member
    from NJ
    Messages: 2,377

    Well, now that you mention it, Does anyone have any stock in Lowe's or home depot? I hear their suppose to be doing very well? Any opinions on that?
  7. Itsgottobegreen

    Itsgottobegreen LawnSite Silver Member
    Messages: 2,177

    What the heck are you buying? I would spend $30,000 on a truck first.

    I put $14,000 down on my dump truck, so I wouldn't have to get it cosigned and a better intrest rate.
  8. Petr51488

    Petr51488 LawnSite Silver Member
    from NJ
    Messages: 2,377

    Im happy with my truck allready. I wanted to get an infiniti g35 coupe.
  9. GreenUtah

    GreenUtah LawnSite Senior Member
    from SLC, UT
    Messages: 866

    Owning a business makes you the plague to creditors, even if your monthly income is six figures...monthly...the reason why is that as a business owner, there is no set payday, nor amount. It takes money to make money and likely you will pay the things that keep money coming in first(like employees, maintenance bills, fuel, etc.) before you'll pay your personal expenses, knowing more money is on the way. As a creditor, you want that money on the day you've agreed because it's all about floats and margins inthe finance world. Because even old, large businesses can experience the cash flow game(only the size of the amounts ever really change, not the circumstances as you grow larger) a business owner will always be higher risk. My employees could have always got a better rate than me. So my better choice was to save and plan for purchases and buy outright and get the best deal instead of a financed deal. The only benefit of owning a biz, as far as financing goes, is some of the large chunks you get to be able to do this. The least amount of financing possible should be the goal of every biz, lawn or not, to keep costs low and margins high, which becomes self sustaining, instead of bleeding off in fees and interest.
  10. Petr51488

    Petr51488 LawnSite Silver Member
    from NJ
    Messages: 2,377

    Thank you for the great reply! Im better off getting employed by my father over the winter and build a better credit and not mention my business aspect. Is that what your saying? Great info BTW!

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