To borrow or not?

[CLEARVIEW TREE]

I know there are many in the tree care biz with lots of neat gear? How did you acquire the expensive stuff like whole tree chippers, buckets,etc? I myself run a very small but extremely busy and fast growing biz . I've never went and got an official biz loan for equipment or anything for that matter with the exception of a new tractor i finance through kubota credit corp. Usually i'd save enuf and pay cash and be done. Got great credit, decent income, decent capital, and around 40k in equity in my home. I'd like another diesel pickup as a secondary vehicle for many reasons. We're gonna sell the home soon and move to the country shooting for a doublewide and a few acres until she graduates pharmacy school. Should i wait till after the sale of the home and the purchase of the new home to get the truck? Besides the tractor i don't owe on a thing, and the thought of a payment sends me scary thoughts. At some point i'd like all new neat equip or close to it, so is a biz loan for me? How did it treat you?

 

[Pete M]

I have a business loan - not for this sort of work, but it's related to an import car business. I had a high turnover which the bank loved. They were always on the phone seeing how things were going. High hopes for booming trade, then a couple of years ago the import market went pretty crap and I borrowed £8K when I had to pay for new stock but there wasn't enough sales. This is now like a shackle around my leg. I'm having to repay £227/month on top of all my other bills and the mortgage, and the bank don't seem to give a stuff about me any more. I still owe over £3k on this business loan and that's the only reason I keep the business ticking over at the moment - to make the loan repayment. In hindsight, the business loan was a bad idea and I wish I've never taken it out.

 

[CLEARVIEW TREE]

Thanks

That's the kina info i was needin man. thanks cya:monkey:

 

[ACE]

If it were me I would probably wait to buy the truck until after you buy your new house. It will lower your credit score if you have outstanding loans, even if you pay on time. It happened to me when I bought my recent house. Even though I put $100k cash down I had 2 truck loans a boat loan and $5k in credit card debt. I still had good credit but my score was lower b/c of all the outstanding debt. Like you I try to save and buy things outright. Hope this helps.

 

[arbor pro]

Best financial setup as far as I'm concerned is a business line of credit. I use existing capital - both personal and business, to secure a $50k line with my bank. At 6.9% annual interest, it's about the same as charging something to my credit card and with similar payment structure - I pay interest every month plus whatever pricipal I want. I usually try to pay a lot of principal during my 7-month work season and interest only during the cold winter months when I take a break from tree work. It' nice to have the payment flexibility while knowing that the financing is in place in case a great buy on a piece of equipment comes along - no waiting for loan paperwork, just call the bank and tell them to deposit 'x' amount of funds from the LOC into my checking. (I only pay interest on the amount of the LOC actually being used).

 

[CLEARVIEW TREE]

Best financial setup as far as I'm concerned is a business line of credit. I use existing capital - both personal and business, to secure a $50k line with my bank. At 6.9% annual interest, it's about the same as charging something to my credit card and with similar payment structure - I pay interest every month plus whatever pricipal I want. I usually try to pay a lot of principal during my 7-month work season and interest only during the cold winter months when I take a break from tree work. It' nice to have the payment flexibility while knowing that the financing is in place in case a great buy on a piece of equipment comes along - no waiting for loan paperwork, just call the bank and tell them to deposit 'x' amount of funds from the LOC into my checking. (I only pay interest on the amount of the LOC actually being used).

Great poin and advice. Fortunately i've had a sizable LOC with the credit union for almost a year now, only used very little and owe zero on it. Guess i'll keep up this process until i need somethin for an enormously big paying job. Thanks