I and a group of friends are researching the idea of a new Financing Company. We would specialize in Landscape, Lawn Care and Tree Service equipment. Our Financing would look more at the business and the business owner’s work/business history. We will not rely only on a customer’s credit file.
I would be grateful for any thoughts or advice, good or bad.
I have a dealer friend who would love to talk to you guys! He gets very aggrevated at some of the companies he deals with that turn customers down that have been good customers to him!
My personal credit # is down into the low 600s for years after starting the darn business :/
Since we've purchased at 0% apr, lawn mowers, plow equipment, vehicles etc.... Ive never missed a payment or defaulted and yet because we dont carry much credit availble line on credit cards.... it hurts us.
I've never evolved our company line of credit on a national level either. Sure we can go to our local dealers, even the Deere dealer and walk out with 500$ in equipment and they know ill pay it the same week.
It sucks that we can pay for so much equipment and have a good net worth and yet our local TD bank laughs when i request a $500 minimal overdraft line of credit, while i had 10k in just one account with them in the winter last year during our rough months :/
I'm sure that credit is the "save all" when you just have to have the equipment. I did start my opperation on credit for the truck and chipper to the sum of about $ 32,000 + other small expenses like insurance. The first couple years were pretty stressfull. I can not advise credit for any small buisness unless you have a huge down payment and the solid contracts in place to make the payments. Grow the company slowly with cash. It's not the exciting way, but who wants to be a slave to a loan? As for starting a loan company you should have a pile of cash that you can afford to lose! I'm not trying to say you'll not get paid back, it's just that you need to think about the risk level of the subject. Most of the companies that would come to you can't get a loan at the regular places cause they are a RISK. It doesn't make them bad people it just means they don't have the right numbers in place for the " bank " to say yes. I know this is not a popular opinion in this world of instant gratification, however the guys and gals who really make the $$$ do it over time. They make a profit over and over in little steps. I will close by saying I would not take a loan in the future.
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