Creditors can KMA

[swyman]

Found a great deal on a Rayco 1672 and was well within my budget, so I thought. Needed $10k.... Peanuts for a loan. "Well Mr. Wyman you have amazing credit BUT you have only been I business for 1 year so we can't do a traditional loan but we can put you in another category but will be a high teen interest rate" . Just don't get the system, I can walk on a car lot and drive off with a $60k truck in an hour but can't get $10k on something that will make me money. Screw these bastards, I'm done with it. Not even going to consider another piece of equipment unless I have cash. How the hell can a person get ahead? Guess it will be another year of "no, sorry you will have to call someone else to do your stumps". I'm renting one for the week right now but for $1060 for a vermeer 752 just is not profitable.

 

[no tree to big]

yea sucks but what happens if you stack your stumps? and then rent a grinder for a day instead of a week you could do it once a week or once every two weeks:msp_wink:

the co I work for has three grinders a 252, a Carlton 7015, and a 752 tow behind and very rarely does one come out with the take down crew unless the job is real far away or we are real slow otherwise the stumps get stacked and they send a separate crew out once maybe twice a week in the contract it says "stumps may not be done on the same day"

I dont know how it would work out for you for getting paid om the rest of the job but the co I work for is very well established so imediate payment is not really a concern

 

[ddhlakebound]

Well, since you're finally at that point....

Get on the phone and talk to everybody within 25 miles who grinds stumps, nail them down to a per inch or per hour price, what they need for a minimum to show up, reach a mutual understanding of whats expected of the grinder guy, mark his cost up just a bit, and still be able to sell the stump job with the removal.

You'll make less on the stumps, and it'll take you more time in organization to complete removals with grinds, but you'll still be able to sell the jobs grinding included, and you won't have the maintenance expense of the grinder. Or the extra trailer to drag around to jobsites.

I still want to own my own grinder again, but for the time being using a sub who works well with me does just fine.

 

[swyman]

Well, since you're finally at that point....

Get on the phone and talk to everybody within 25 miles who grinds stumps, nail them down to a per inch or per hour price, what they need for a minimum to show up, reach a mutual understanding of whats expected of the Ogrinder guy, mark his cost up just a bit, and still be able to sell the stump job with the removal.
P
You'll make less on the stumps, and it'll take you more time in organization to complete removals with grinds, but you'll still be able to sell the jobs grinding included, and you won't have the maintenance expense of the grinder. Or the extra trailer to drag around to jobsites.

I still want to own my own grinder again, but for the time being using a sub who works well with me does just fine.

I did that last year when I started up but the guy I was using started to not show up or return customers calls and all fell back on me. Tried to get another local tree service that does stumps to do it but he was so busy it was a pain for him which from back on me again. Just going to be straight with the customer and not try to offer it. I could stack them up but the.vermeer dealer is 50 miles away so it would really put me in the negative. I did however grind 12 stumps with it on Monday and 6 of them were very very large. Is pretty amazing what that machine can do! Someday, I have to much on the job board to worry about it now I guess. Just want to be a complete service.

 

[MacLaren]

Found a great deal on a Rayco 1672 and was well within my budget, so I thought. Needed $10k.... Peanuts for a loan. "Well Mr. Wyman you have amazing credit BUT you have only been I business for 1 year so we can't do a traditional loan but we can put you in another category but will be a high teen interest rate" . Just don't get the system, I can walk on a car lot and drive off with a $60k truck in an hour but can't get $10k on something that will make me money. Screw these bastards, I'm done with it. Not even going to consider another piece of equipment unless I have cash. How the hell can a person get ahead? Guess it will be another year of "no, sorry you will have to call someone else to do your stumps". I'm renting one for the week right now but for $1060 for a vermeer 752 just is not profitable.

......sounds like possible discrimination. The bank playin games......with your "amazing" credit i would no doubt consult an attorney. You shouldnt be forced to opt for that high azz rate......just my 2cents......

 

[Pelorus]

Found a great deal on a Rayco 1672 and was well within my budget, so I thought. Needed $10k.... Peanuts for a loan. "Well Mr. Wyman you have amazing credit BUT you have only been I business for 1 year so we can't do a traditional loan but we can put you in another category but will be a high teen interest rate" . Just don't get the system, I can walk on a car lot and drive off with a $60k truck in an hour but can't get $10k on something that will make me money. Screw these bastards, I'm done with it. Not even going to consider another piece of equipment unless I have cash. How the hell can a person get ahead? Guess it will be another year of "no, sorry you will have to call someone else to do your stumps". I'm renting one for the week right now but for $1060 for a vermeer 752 just is not profitable.

When trying to come up with $$$ for mini skidsteer purchase back in January I was in the same boat. Even though house mortgage is paid off, & have been operating my tree biz fulltime over ten years, etc. Big ordeal. To get 10 grand increase to line- of-credit the bank wanted to do a home inspection that was gonna cost a couple hundred bucks. Ended up getting financing through dealer at a lower interest rate than the bank was willing to offer.

 

[MacLaren]

ive had best luck with credit unions....

 

[OLD MAN GRINDER]

Check into WESTERNEQUIPMENTFINANCE.COM

I just put my new bandit thru them,,,low interest rate,,,no problem...

Bob....

 

[Como]

How many places did you shop for finance?

 

[superjunior]

yea sucks but what happens if you stack your stumps? and then rent a grinder for a day instead of a week you could do it once a week or once every two weeks:msp_wink:

the co I work for has three grinders a 252, a Carlton 7015, and a 752 tow behind and very rarely does one come out with the take down crew unless the job is real far away or we are real slow otherwise the stumps get stacked and they send a separate crew out once maybe twice a week in the contract it says "stumps may not be done on the same day"

I dont know how it would work out for you for getting paid om the rest of the job but the co I work for is very well established so imediate payment is not really a concern

we're pretty much the opposite. If there's grinding to do on a job then a grinder is going with us. I usually start grinding when the guys are raking up. Only takes about an extra 10 minues but the job is done and invoice mailed out the next day.

Op I had to go through the same crap when i financed my first piece of equip. Credit was good but business was new and had no history. Think I was paying high teens interest. Just bought a brand new grinder with half down and now paying 6%. I'd bite the bullet on the first one and get it behind you. Shop around and get the best rate you can find.

 

[Kottonwood]

I have been going through this same #### since I started my business less than two years ago. I ended up taking out a loan in my personal name on my 08 ford to pay for the bucket truck. Everything else I have ended up just waiting and paying cash for.... I spent over 100gs on equipment last year.... ate a lot of ramen noodles too. At this point I am glad I haven't taken any loans out on anything, though it would have been nice last year.

It was unbelievable though, they gave me 30gs at 3.9% for my ford that I paid 21 for, I could maybe sell it for 18-20 right now. They have seen 30-50 grand come in and out of my business account monthly and couldn't figure out a way to get me a 25k loan.... horse ####. My two cents is that these big bankers don't want anything to do with small business and would rather it didn't exist... JMO



You can always do what I did.... get a used Alpine Magnum, work your ass off and wait till you can afford that nice grinder. Currently I am going at it with a magnum and stump slayer (mini attached grinder)

 

[Bigus Termitius]

shop around. I got a decent loan from my local bank, it's a bigger regional chain, but small town local.

 

[swyman]

How many places did you shop for finance?

6, the very first one was Landmark equipment and they pre approved me for 16500 and was first machine I looked at but didn't get. After that I figured I would not have a problem but 2 places with Rayco, 1 with Vermeer, 2 with global exporters which all come up crap. Gave the go ahead to a close freind that approched me to grind stumps if he bought one. Called him today and said pull the trigger, I will keep you busy. I have work lined up for 2 weeks.right now with calls.everyday so I don't think I will run out of stuff to do. Keep the wheels spinnin and the beavers grinnin!

 

[no tree to big]

I just googled the town under your name and I guess for your location it kinda sucks to try and rent a grinder the closest place I could come up was on the north end of toledo just over the border I think it was like 18 mi so not to bad but all they show on there website is a 25 hp rayco but for 160 a day it could work for ya on some stuff. where I live I can go rent a stump grinder from 15 different places within 20 miles of my house and I have tons of options from the little 6hp praxis pos's up to a big tow behind

 

[swyman]

I just googled the town under your name and I guess for your location it kinda sucks to try and rent a grinder the closest place I could come up was on the north end of toledo just over the border I think it was like 18 mi so not to bad but all they show on there website is a 25 hp rayco but for 160 a day it could work for ya on some stuff. where I live I can go rent a stump grinder from 15 different places within 20 miles of my house and I have tons of options from the little 6hp praxis pos's up to a big tow behind

There's a sunbelt in Toledo that I rented a 252 with dull teeth at the tune of 350 a day. Lost money on fuel with that one. Have the 752 right now @$1060 for the week and will be about $300 ahead. Really not worth the aggrevation for me to do it this way. I have to own one. At the rate I am going I will be able to pay.cash for one later this year if it stays like it is.

 

[husabud]

I bought a set of green teeth for the local rentals sc252. They get $300 / day so I stack stumps to make it worth my time. When I get to the first job their teeth come off, unless they're sharp, and mine go on. Grind all day and return it with their teeth. It isn't perfect, but it works. I just pulled the trigger on a 07 sc252 for $4500. 635 hrs with two sets of teeth. Now my retired friend with nothin better to do can grind for me.

 

[pdqdl]

You guys are doing your credit all wrong. Banks like to do business with businessmen. That means you go to a bank with some documents that have at least been signed by a CPA. You need to have an income statement (profit & loss statement), and a balance sheet, and your last three tax returns.

Go into several banks, inquire about their service charges, their loan policies, and make noises that sound like they need to impress you, not the other way around. Tell them you want a bank that will give you an open line of credit. Explain that sometimes you get big projects, and it would help your payroll and materials purchases. Be sure that you have a very realistic limit on what you might wish to borrow, and make SURE that you don't let them think you are just planning on buying a stump grinder that no one will finance.

If you go in with the right documents before they ask for them, they will take you very seriously. If you are prepared to show them a business plan, you might just get a bidding war between the banks for a better interest rate.

Once you get an open line of credit, use it! Never let it get out of control, and make sure that every year you bring it down to a zero balance. With an open line of credit, financing longer term things like stump grinders, bucket trucks, or whatever...just comes real easy.

Say you go to an auction & spend 22k on a neat truck. Your line of credit is only 20k, but you have 4 grand in the bank, and payroll is coming up. Write the check, call the bank and tell them to deposit 20 grand. Then drive the truck to the bank, and ask them to write up a 3 year loan for the truck. They have already loaned you the money! They will be happy to get guaranteed interest income on a secured note, and that liberates your line of credit to manage payroll or other cash flow problems.

THEN...rather than leaving a big stash of money in your bank account, pay down any line of credit. With a line of credit, you don't need to save money for your desperate cash expenses, and you can pay off the charge cards and other trade accounts when the bill comes in. Then your credit gets better with them, too.

I did that way back in 1984, and I have never been turned down for a loan since then.

 

[swyman]

You guys are doing your credit all wrong. Banks like to do business with businessmen. That means you go to a bank with some documents that have at least been signed by a CPA. You need to have an income statement (profit & loss statement), and a balance sheet, and your last three tax returns.

Go into several banks, inquire about their service charges, their loan policies, and make noises that sound like they need to impress you, not the other way around. Tell them you want a bank that will give you an open line of credit. Explain that sometimes you get big projects, and it would help your payroll and materials purchases. Be sure that you have a very realistic limit on what you might wish to borrow, and make SURE that you don't let them think you are just planning on buying a stump grinder that no one will finance.

If you go in with the right documents before they ask for them, they will take you very seriously. If you are prepared to show them a business plan, you might just get a bidding war between the banks for a better interest rate.

Once you get an open line of credit, use it! Never let it get out of control, and make sure that every year you bring it down to a zero balance. With an open line of credit, financing longer term things like stump grinders, bucket trucks, or whatever...just comes real easy.

Say you go to an auction & spend 22k on a neat truck. Your line of credit is only 20k, but you have 4 grand in the bank, and payroll is coming up. Write the check, call the bank and tell them to deposit 20 grand. Then drive the truck to the bank, and ask them to write up a 3 year loan for the truck. They have already loaned you the money! They will be happy to get guaranteed interest income on a secured note, and that liberates your line of credit to manage payroll or other cash flow problems.

THEN...rather than leaving a big stash of money in your bank account, pay down any line of credit. With a line of credit, you don't need to save money for your desperate cash expenses, and you can pay off the charge cards and other trade accounts when the bill comes in. Then your credit gets better with them, too.

I did that way back in 1984, and I have never been turned down for a loan since then.

I thought that is what I had last year and got burned. I pulled all my 401k money out when I lost my supervisor job at Ford to start this business. I knew I had enough for a truck but would be about $10k short for a chipper. Found and paid cash for the truck and had the line of credit setup before I even bought the truck. I was all set, so I thought. Found a nice bandit 250xp on a online auction and won the bid. Went to the bank to withdraw the $10k in my line of credit account and they started asking for all kinds of documents and the title to my newly purchased bucket truck to put their name on it too. This means I would have to pay full coverage on the truck which would have crippled me. Luckily my mother in law works at this bank and didn't like how I was being treated and gave me the money to get it and pay back. I had no option since I made the purchase online so I did it. I still owe $2k but am waiting on checks from jobs and I will have it done. I am just so pissed on this whole deal I don't know how to handle it. You guys have opened my eyes to some different ways to approach this I may give it a shot. Thanks to all and sorry for rambling but I really want to be successful. Nothing comes easy and I like the fight but sometimes its hard to get up when you keep getting knocked down.

 

[pdqdl]

When a bank has a line of credit for you, they expect to get some security for a balance. They also are not going to trust you for a few years. My bank has gotten so used to me, I don't think they have even asked for any financial statements for 5 years.

You should expect to put up titles on vehicles, your house, all sorts of things. They are not likely to force insurance coverage if you give them lots of security. If all you have is a truck, chipper, and some tree tools, they are going to consider that an unsecured loan without some insurance on the truck to protect their interests.

On the other hand, if you have a place of business that you own, they can step into a 2nd mortgage holder position on your property, list all your equipment on the note, and be quite content with that. Unlike tree trimmers, they are not in the business of taking risks. They only want to make loans that are guaranteed to be profitable.

This means that you need to offer enough capital (property of some sort) so that they can happily repossess your stuff if you don't pay off the loan.

When you walk in the bank doors with the right financial documents, it means that you are a smart enough businessman to keep making money and pay off their loan. Failure to have the right stuff means that you are a bigger risk, and they will charge you more interest for taking that risk.

 

[swyman]

When a bank has a line of credit for you, they expect to get some security for a balance. They also are not going to trust you for a few years. My bank has gotten so used to me, I don't think they have even asked for any financial statements for 5 years.

You should expect to put up titles on vehicles, your house, all sorts of things. They are not likely to force insurance coverage if you give them lots of security. If all you have is a truck, chipper, and some tree tools, they are going to consider that an unsecured loan without some insurance on the truck to protect their interests.

On the other hand, if you have a place of business that you own, they can step into a 2nd mortgage holder position on your property, list all your equipment on the note, and be quite content with that. Unlike tree trimmers, they are not in the business of taking risks. They only want to make loans that are guaranteed to be profitable.

This means that you need to offer enough capital (property of some sort) so that they can happily repossess your stuff if you don't pay off the loan.

When you walk in the bank doors with the right financial documents, it means that you are a smart enough businessman to keep making money and pay off their loan. Failure to have the right stuff means that you are a bigger risk, and they will charge you more interest for taking that risk.

You have been very helpful. It makes sense and now I have some ammo. I have no problem putting my shop on 5 acres up or even my house on a 10k loan. I know I will have no problem paying that loan and you have given me hope. Now I just need to figure out when to do it. Lots of work lined up and as long as the weather permits I am not stopping. Thanks for the direction. I as well as everyone in this business can work like a crazyman but I guess I lack business sense.
Shane