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Equipment financing help

Discussion in 'Financing' started by Davidblack515, Feb 3, 2014.

  1. Davidblack515

    Davidblack515 Member

    Joined:
    Feb 3, 2014
    Messages:
    10
    Location:
    Roachdale Indiana
    I'm looking for help on getting financed for mini excavator. I have only been working for my self for 10 months now. I have a 2002 PC-150 excavator new holland LT185b two ford F250 trucks skidder trailer and gooseneck trailer in the business. I paid for all this with out financing so the business has no credit but I do have equity. Personally I have very good credit last time I seen my credit score it was 699 I believe and that was three months ago. But the local banks do not want too work with me bc I have not been in business for three years and Im not on a pay role. I talked too some dealers too but I have really done my home work on what I want and believe I can get a better deal buying from an individual. So my question is dose any one have a bank they have used too finance me I'm only look too barrow 15 too 20 thousand and pay the rest out of pocket any advice would be very helpfull.
     
  2. pondo

    pondo Well-Known Member

    Joined:
    Mar 24, 2013
    Messages:
    155
    Location:
    canada
    Watch out for financing/leasing companies!!!
    I recently got burned by National leasing in Canada, need similar money for skidsteer.
    Agent promised lease at 8%. Turned out the real rate was 13% !!!!
    There is tons of free websites. That will reverse calculate lease rates by entering the term and payments!
    Also recommend having good a lawyer or accountant read any finance /lease agreement BEFORE you sign.
    I agreed to a capital lease ie with a 10 percent residual...Done this 1/2dozen times our the years all worked normal so I did not fully read the agreement as I thought it was standard boiler plate ****....well they slid some nasty **** in there!
    10%penalty for paying off early???
    90 day notice at end of lease that you will be paying the 10 percent residual
    And if you don't you have to buy the unit again from them at full market value!!!
    So spend the $100 to have a" professional " ie someone with more patients then me to read any agreement!
     
  3. CM1995

    CM1995 Super Moderator

    Joined:
    Jan 21, 2007
    Messages:
    8,238
    Occupation:
    Running what I brung and taking what I win
    Location:
    Alabama
    Welcome to the Forums Davidblack515! :drinkup

    Before we get into the "in's and out's" of equipment finance, what are you looking at buying and why do you need it? What is your work load and what is your future business plan for the business?

    You have done a good job of being debt free in your business so far and from experience I will tell you that is the right course.;)

    Give us a little more background on your business and the market you serve.
     
  4. Davidblack515

    Davidblack515 Member

    Joined:
    Feb 3, 2014
    Messages:
    10
    Location:
    Roachdale Indiana
    Well I'm looking too buy a mini bc the last 4 months I have spent at least 1000$ a month on rental of a mini from a local rental business. The majority of my work is in commercial aquatics I Have a contract with a commercial pool builder to do all the excavation for the piping. My work load is very high for the spring there r 6 jobs that I have with others to be added very soon just in the aquatics side that will be completed before June and I'm sure I'll pick up some residitual jobs in the area too in the spring.
     
  5. CM1995

    CM1995 Super Moderator

    Joined:
    Jan 21, 2007
    Messages:
    8,238
    Occupation:
    Running what I brung and taking what I win
    Location:
    Alabama
    So you have the work, the cash flow and are spending enough on rental to justify purchasing - it's time to buy IMO. Problem is you are a new company/entity without established credit.

    My suggestion would be to RPO (rental purchase option) a machine and convert it to a purchase a couple of months or whatever parameters you can get from the dealer. Basically you rent the machine monthly but have an option to pull the trigger and purchase the machine and a % (from 70-90%) of the rent you have already paid goes towards the purchase price and is your down payment.

    The rent paid which becomes your down payment shows the finance company you have the ability to pay for the machine, thus helping your termed financing and your credit. For example if you would have RPO'd the mini you have been using for the last 4 months, you would have 70-90% of that $4000 as a down payment on the machine. You also don't have to use your cash on hand, you build up your equity as you work it.

    Another bonus to RPO is if you don't like the machine or it doesn't fit your operation, you can turn it in and just pay the rent you already were paying.

    This program can be done for new or used. I recently converted a 321DL from a RPO to a purchase from my Cat dealer. You will probably have to go to a dealer to get an RPO but it's worth it to check it out.
     
    Last edited: Feb 4, 2014
  6. Davidblack515

    Davidblack515 Member

    Joined:
    Feb 3, 2014
    Messages:
    10
    Location:
    Roachdale Indiana
    I have looked in too that a lot the local bobcat dealership has been very good about working with me on a RTO but they all only have minis that r more than I would like too spend right now but it might be my only option . I have seen some people talk about using citi group and CNH I have tried look at them on the Internet but could not find very much on any of them. would any one know the best way or who too contact at one of them too see they could work with me.
     
  7. drummer

    drummer Active Member

    Joined:
    Oct 4, 2013
    Messages:
    26
    Occupation:
    Site Contractor
    Location:
    Florence, SC
    Check with your CAT dealer on equipment and CAT Finance. Great to work with in my opinion.
     
  8. Deeretracks

    Deeretracks Senior Member

    Joined:
    Feb 18, 2014
    Messages:
    568
    Occupation:
    Shop Foreman
    Location:
    Western Washington
    Cat's FCC Equipment Financing Inc. will loan on other makes and use your existing equipment equity as collateral.
     
  9. Deeretracks

    Deeretracks Senior Member

    Joined:
    Feb 18, 2014
    Messages:
    568
    Occupation:
    Shop Foreman
    Location:
    Western Washington
    I suppose it depends on the terms. We've used them for refinancing and open lines of credit also.
     
  10. monster76

    monster76 Senior Member

    Joined:
    Aug 15, 2013
    Messages:
    499
    Location:
    in my equipment
    First If I can I always try and use the financing company of my dealer if I am purchasing from. They will you to sign a personal guarantee. If I am purchasing private party I use my local bank small business credit union and they ask for collateral don't let them fool you into signing your life away. That's just me
     
  11. farmsales1

    farmsales1 Member

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    Sep 6, 2017
    Messages:
    8
    Location:
    Albany, GA
     
  12. farmsales1

    farmsales1 Member

    Joined:
    Sep 6, 2017
    Messages:
    8
    Location:
    Albany, GA
    What you are referring to is an evergreen clause, I am in the leasing business and I try my best not to do business with companies that use an evergreen clause. There are better companies out there that want to do your financing. I advise my clients to look out for that. If I can help you or anyone to get financing on Construction, Farm, Forestry and Commercial Trucks you can message me on this site. I will work hard to get you a fair and honest lease.