i am just out of high school and i am looking at getting into the heavy equipment area of work. what chance would i have at getting a loan/loans after say a yr or 2 of full time work? also in what ballpark area would be the biggest loan i could get?
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What chance do i have?
- Thread starter CaT1029
- Start date
greywynd
Well-Known Member
Well......to answer that with what you supplied would be similar to telling you your chances of winning a lottery.
It's not how big a loan you can get, but what return you can make on the money. As a one person operation, I can make as much at the end of the week as some larger machines, simply because I can keep my overhead lower. (I can pull my mini excavator with my one ton dump, do all my own maintenace, and basically can do most jobs on my own.)
A large excavator, for example, either requires you have a highway truck/float, or a big enough dump and float to move it. The highway truck? Unless you also hire a driver that can do trucking while your on a jobsite, it sits except for when moving the machine. Now the excavator has to have enough return to pay for all three pieces of equipment. Dump truck? Again, either a driver is required, or it's a big amount of money sitting while you dig.
Small equipment, though not as impressive, doesn't cost nearly as much either, and demand still seems to be increasing. If I need to I can use the truck to get groceries even....try doing that with a triaxle dump. (Though I'm sure guys on here have done it, just not something I'd want to do weekly.)
The bank will want to see the return ratio on the money, especially with it being a business loan. This is what counts...how you're going to repay it. The bank will want a business plan from you, this is the 'plan' for the business, and will be an important document for you and them.
Mark
It's not how big a loan you can get, but what return you can make on the money. As a one person operation, I can make as much at the end of the week as some larger machines, simply because I can keep my overhead lower. (I can pull my mini excavator with my one ton dump, do all my own maintenace, and basically can do most jobs on my own.)
A large excavator, for example, either requires you have a highway truck/float, or a big enough dump and float to move it. The highway truck? Unless you also hire a driver that can do trucking while your on a jobsite, it sits except for when moving the machine. Now the excavator has to have enough return to pay for all three pieces of equipment. Dump truck? Again, either a driver is required, or it's a big amount of money sitting while you dig.
Small equipment, though not as impressive, doesn't cost nearly as much either, and demand still seems to be increasing. If I need to I can use the truck to get groceries even....try doing that with a triaxle dump. (Though I'm sure guys on here have done it, just not something I'd want to do weekly.)
The bank will want to see the return ratio on the money, especially with it being a business loan. This is what counts...how you're going to repay it. The bank will want a business plan from you, this is the 'plan' for the business, and will be an important document for you and them.
Mark
cat320
Charter Member
Well getting a loan right out of school will be tough I think. For one thing you will need some kind of collateral . you might get a real small loan like you do for a car but you will have to have some full time work and some kind of bank account to even think of getting $$ from a bank.
Your best bet is to work for a co get the experience you while getting trained in that field by them.
itsgottobegreen
Well-Known Member
You could always try the SBA. But your odds of getting anything over $10k is next to none. You could always finance equipment threw an equipment company. But thats only going to happen if someone could co sign it for ya.
i was also thinking about your suggestion. the only problem is i have nothing to offer anybody who id want to work for. do they usually hire people and train them or just go for experienced operators? my plan is to work for somebody and learn and then start doing a sort of side business when i can afford it and grow it from there, are there any suggestions you have in the way of paperwork, like whether to just get a loan for the equipment and not put a business name on it right away? what do you feel is the best approach to this? thanks for the input.
digger242j
Administrator
We,ve had a number of similar discussions about how to break into the business, and they've come from a (perhaps) surprising cross-section of people--young people just starting to look at a career path, and some pushing middle age, who realize that they'd like to make a change in careers.
Do a search and I'm sure you'll find a few of those threads.
In a nutshell, one theme seems to recur in all of them--The fact that you recognize that you have an ambition to do this, combined with your willingness to do some research and ask good questions, will be a big help in getting started. The fact that you have no verifiable experience in the field will be a stumbling block. The experience you get, the things you learn, on the ground, doing the grunt work, pretty much can't be duplicated anywhere else, and is an important ingredient in whatever higher positions you might aspire to.
From the above, it follows that, to find someone who you can convince of your ambition, and your native talent, and get them to give you a chance to show what you're made of, and learn what you can, is a good way to get started in this field.
There may be other paths, but a large number of the people you meet in the field will have followed that one. (And once you see what it's done to them you might decide on law school instead. Worry about getting financing a couple of years down the road...) :wink2
Do a search and I'm sure you'll find a few of those threads.
In a nutshell, one theme seems to recur in all of them--The fact that you recognize that you have an ambition to do this, combined with your willingness to do some research and ask good questions, will be a big help in getting started. The fact that you have no verifiable experience in the field will be a stumbling block. The experience you get, the things you learn, on the ground, doing the grunt work, pretty much can't be duplicated anywhere else, and is an important ingredient in whatever higher positions you might aspire to.
From the above, it follows that, to find someone who you can convince of your ambition, and your native talent, and get them to give you a chance to show what you're made of, and learn what you can, is a good way to get started in this field.
There may be other paths, but a large number of the people you meet in the field will have followed that one. (And once you see what it's done to them you might decide on law school instead. Worry about getting financing a couple of years down the road...) :wink2
I remember the first time I went for an equipment loan and how frustrated and mad I got. "You can't borrow $100,000 because you have never borrowed $100,000 before" well thanks genius. So to get approved I went by means of the rental route. Most companies will apply all your rent towards down payment for 3 months and then drop by percentages, say 80% for 4-6 months 70% for 7-8 months and so on. You end up paying more per month for rent than you would with a loan but it lets you show them you can make the payments. You also are making money so you can kick in more money towards the down payment.
This was the only feasible option that I could come up with at the time and it worked. Once that first loan is out of the way other loans are easier to come by and you have some bargaining power. As far as searching for better credit rates and terms.
I will also add that I am with Cat320 . Never would of thought about going out on my own without the experience and contacts I gained through working with other companies.
This was the only feasible option that I could come up with at the time and it worked. Once that first loan is out of the way other loans are easier to come by and you have some bargaining power. As far as searching for better credit rates and terms.
I will also add that I am with Cat320 . Never would of thought about going out on my own without the experience and contacts I gained through working with other companies.
jules dalsey
New Member
Loans
have you gotten the answer you are looking for? i have been in your situation before.
there are comapnies that will help you. i know one company but i am not sure if i am allowed to name names here. but so long that you keep your credit strong, you will have someone that is willing to take the risk for premium.
YOu have to consider budget first. then, realize the potential income after costs such as gas, insurance, and your opportunity cost. I have often hear people who want to run a business b/c they are sick of operating. but in reality, if you don't know the true cost of business, your business will suffer.
have you gotten the answer you are looking for? i have been in your situation before.
there are comapnies that will help you. i know one company but i am not sure if i am allowed to name names here. but so long that you keep your credit strong, you will have someone that is willing to take the risk for premium.
YOu have to consider budget first. then, realize the potential income after costs such as gas, insurance, and your opportunity cost. I have often hear people who want to run a business b/c they are sick of operating. but in reality, if you don't know the true cost of business, your business will suffer.
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Welcome to Heavy Equipment Forums jules!!:drinkup
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CaT1029, I'd recommend you check with our sponsor, linked at the top of the page, and see if they are able to help you with any of your questions.
We have no problem here with members exchanging personal experiences with other services, good or bad.
CaT1029, I'd recommend you check with our sponsor, linked at the top of the page, and see if they are able to help you with any of your questions.
Finance Guy
Well-Known Member
CaT1029
Give me a call if you are still interested in getting some ideas on financing. Even if I am unable to get you financing I could give you some options to help you.
I look forward to assisting you.
Finance Guy/Todd
Give me a call if you are still interested in getting some ideas on financing. Even if I am unable to get you financing I could give you some options to help you.
I look forward to assisting you.
Finance Guy/Todd
crazycajun
Well-Known Member
Cat financial, d5n at 21 years old....
thanks for everyones replies, i am actually going to put that dream on hold for now, i am currently working with a commercial construction company.....not exactly what i had in mind but the $$ is worth it. i think i could make a business work out someday down the road but like everyone has said, i need to establish credit and all that. once i find that opportunity that may allow me to break into the industy i will probably go for it with everything i got, summers i usually work around 80 hrs a week just for my one job.....not to mention the other ones i have, so i dont think there will be any problem with me not working at it hard enough. thanks for everyones input.:usa:usa
digger242j
Administrator
FWIW, do it before wife and kids happen. I'm certainly not saying anything against starting a family, but I'd be willing to bet that 9 out of 10 such dreams never come true once the pressures of supporting that family have to be weighed against the risks and effort that starting a business entails. And working those 80 hour weeks is a whole lot easier when there's nobody waiting for you to get home...
AtlasRob
Senior Member
Starting out
Cat1029, For many years people kept telling me to get my own machine, I did a lot of research and three times over 20yrs I couldn't make the figures outway the risks, mainly due to the reasons Digger mentions. Finally I found a niche in the market and went for it.
Keep your dreams alive, gain experience and contacts. I am sorry to say that its a fact of life that many times it is WHO you know as much as what you know that will give you the "in" that you need.
I have never met you, but from your questions and comments you will know when the time is right. Dont fret over money to get started, gain the experience first. Good luck. :drinkup
Cat1029, For many years people kept telling me to get my own machine, I did a lot of research and three times over 20yrs I couldn't make the figures outway the risks, mainly due to the reasons Digger mentions. Finally I found a niche in the market and went for it.
Keep your dreams alive, gain experience and contacts. I am sorry to say that its a fact of life that many times it is WHO you know as much as what you know that will give you the "in" that you need.I have never met you, but from your questions and comments you will know when the time is right. Dont fret over money to get started, gain the experience first. Good luck. :drinkup
Finance Person
Member
If you have good credit and depending on your equipment it’s possible to get equipment lease financing application only program. There are a few start up programs out there and you should have at least a 640 fico credit score to have a shot. Also, having another personal guarantor sign on will help too.
Financeman
New Member
Start-up capital IS available
Start-up companies ARE able to obtain LEASE-TO-OWN financing but will be limited in the total amount they can obtain - say maybe $50,000 towards equipment purchases. Perhaps a little more or a little less. Of course a lot depends on your credit score.
A start-up would be a company in business less than 2 years. Once you are 2years in business more financing options would become available, i.e. larger amounts.
It is very important that you build a credit history. If you do not have any loans or credit cards GET SOME. No lender will lend to you unless you have an established credit history and a credit score. Open 3-4 credit cards if you don't already have 3-4 loans. I'm not saying to run the credit cards up but keep them ACTIVE by paying for groceries and other daily purchases with them and then you can pay the balence off by sending a check at the end of the mos.
Good luck!
Start-up companies ARE able to obtain LEASE-TO-OWN financing but will be limited in the total amount they can obtain - say maybe $50,000 towards equipment purchases. Perhaps a little more or a little less. Of course a lot depends on your credit score.
A start-up would be a company in business less than 2 years. Once you are 2years in business more financing options would become available, i.e. larger amounts.
It is very important that you build a credit history. If you do not have any loans or credit cards GET SOME. No lender will lend to you unless you have an established credit history and a credit score. Open 3-4 credit cards if you don't already have 3-4 loans. I'm not saying to run the credit cards up but keep them ACTIVE by paying for groceries and other daily purchases with them and then you can pay the balence off by sending a check at the end of the mos.
Good luck!
Fortis Capital
New Member
Its going to depend on your credit. Equipment financing would be the way to go but but the dollar amount will be limited. No more than $25-30K. What equipment would your business need?
Financeman
New Member
I would be able to get you perhaps up to $75,000 as I have about 20 different sources and therefore can get you say $25,000 from each source.