Financing Woods equipment?

[Jhenderson]

The State doesnt sell the insurance, but they do require you to have it. Violations can be treated as a misdemeanor or as a felony. Farm workers are exempt if they are doing Agr work. Hireing him to work for me was not farm work and he was not considered a farm worker. NC state is different than a lot of states. Here is what the rules state.

If you subcontract work to a subcontractor who does not have workers’ compensation insurance, you may be liable for the work-related injuries of the subcontractor’s employees, regardless of the number of employees you or the subcontractor employs. For information on workers’ compensation requirements in the trucking industry, please click here.

If You Fail to Carry Workers’ Compensation Insurance, You May:
1) Face stiff financial penalties;
2) Be charged with a misdemeanor;
3) Be charged with a felony; and
4) Be imprisoned.
http://www.ic.nc.gov/wcinsrqmt.html

Working and bidding on jobs, I got a lot of work simply because I did have WC insurance on my employees. In fact a lot of contractors would ask me up front if I had the insurance. My having the insurance meant they didnt have to provide it for me to work on their job sites. I also carried a $1mil general liability policy and had a Dunns number which allowed a large contracting company to find me for any projects they might have in my area. This allowed me to do work for the state and local governments.

Also for information, If as a homeowner you hire the neighbors kid to mow your grass and that kid doesnt have his own insurance, you as the homeowner are responsible to provide the insurance and if he cuts his foot off mowing your grass you are finacially responsibile. Now I have no way of knowing how many people on this site that cuts trees or scrounges firewood on someone elses property that dont carry insurance. I would guess the number to be more than one or two. By law, you should have insurance or the homeowner you are working for should have insurance coverage on you while you are on his property.

Been through this too many times to count in the last 36 years. I am a sole proprietor. In my state it’s illegal for me to purchase workman’s comp on myself. A waiver of W/C stating self employment is all that’s required for legality. A one time outlay of cash in the amount you quoted for non continuing assistance is known as casual labor. Edmployment regulations are far different than permanent hires. That’s why your quoted regs say you MAY , not you will. I’ll wager you had other things they were interested in and that was just a thumb in your eye.

 

[muddstopper]

Been through this too many times to count in the last 36 years. I am a sole proprietor. In my state it’s illegal for me to purchase workman’s comp on myself. A waiver of W/C stating self employment is all that’s required for legality. A one time outlay of cash in the amount you quoted for non continuing assistance is known as casual labor. Edmployment regulations are far different than permanent hires. That’s why your quoted regs say you MAY , not you will. I’ll wager you had other things they were interested in and that was just a thumb in your eye.

Thumb in the eye or not, they wanted the money or would cancle my insurance which would have put me out of business, and I would still have to pay the money. Setting at my kitchen table with the auditor and all the paperwork spread out isnt the best time to search out what is right or just bull crap. Next time I have a audit, I will just get you to come over and explain the rules to them.

In Nc, as a owner, I would not have to have WC coverage, but I was still counted as one of the 3 employees when it came to meeting the requirement to actually have the insurance on my employees. I had 3 employees full time, plus myself and my wife for a total of 5 employees. I dont remember all the ins and outs of the situation as its been several years ago, but pretty sure the farmer was considered a subcontractor and required to be covered either under his own insurance or be provided insurance by myself. I only hired him because he was located next door to the property I was working on and I wouldnt need to haul my own equipment to the site. It would have taken me longer to haul my equipment back and forth than it would to do the actual work. The mistake I made was writing tractor work on the bottom of the check. If I had left the "for" part blank or written hay or straw or anything besides work, I wouldnt have been charged. I bought a lot of straw and hay after that.

 

[KiwiBro]

He had life insurance, retirements, etc. His kids also receive SSI now but it was not close to immediate. There were fights everywhere with final payments to his wife on life insurance and such. I think they even were fighting some of it because of DR prescribed medications. Don't know how NZ is but here it seems lawyers and legals get their fingers in everything.

NZ is different and has a certain lack of ambulance chasers and litigiously inclined, but that's changing unfortunately. It's a shame that some sort of probate period doesn't automatically extend to any claims against the estate or the potential beneficiaries where the latter can show they would suffer hardship until the estate /insurance pays out.

 

[ChoppyChoppy]

When it comes to financing equipment I struggle justifying buying used. The used rates are crazy so if I'm buying used its usually cash. I really wanted (not needed) a Wacker loader but didn't like the price of a new unit. I found a used unit at I price I liked and spend a ton of time trying to finance it at a reasonable rate. I finally got a great rate with Ag direct with a similar rate to my mortgage. They had much more involved paperwork upfront than I have ever experienced but once we got past that they were excellent to deal with. I had looked at some from muddstopper's list but the rates were crazy IMO. A creative idea I had was to refinance trucks I own or have good loan to value ratio. I could get great rates, with a very simple process and buy the equipment with the money.

This is a custom built machine, so would be tough to find it used.
My trucks are "valueless" in the eyes of most lenders. Too old or too many miles (they want stuff that is under 100k miles and no older than 5-7 years.)

 

[Jhenderson]

Thumb in the eye or not, they wanted the money or would cancle my insurance which would have put me out of business, and I would still have to pay the money. Setting at my kitchen table with the auditor and all the paperwork spread out isnt the best time to search out what is right or just bull crap. Next time I have a audit, I will just get you to come over and explain the rules to them.
Up
In Nc, as a owner, I would not have to have WC coverage, but I was still counted as one of the 3 employees when it came to meeting the requirement to actually have the insurance on my employees. I had 3 employees full time, plus myself and my wife for a total of 5 employees. I dont remember all the ins and outs of the situation as its been several years ago, but pretty sure the farmer was considered a subcontractor and required to be covered either under his own insurance or be provided insurance by myself. I only hired him because he was located next door to the property I was working on and I wouldnt need to haul my own equipment to the site. It would have taken me longer to haul my equipment back and forth than it would to do the actual work. The mistake I made was writing tractor work on the bottom of the check. If I had left the "for" part blank or written hay or straw or anything besides work, I wouldnt have been charged. I bought a lot of straw and hay after that.

Once again, “They” didn’t provide your insurance. Therefore “They” can’t cancel it. You have W/C because you’re an employer. You can opt out for yourself and and your wife if she’s a corporate officer, but you must cover your employees. The farmer you hired wasn’t an employee. And as a sole proprietor or DBA he’s not required to have his own. Been there.

 

[muddstopper]

Once again, “They” didn’t provide your insurance. Therefore “They” can’t cancel it. You have W/C because you’re an employer. You can opt out for yourself and and your wife if she’s a corporate officer, but you must cover your employees. The farmer you hired wasn’t an employee. And as a sole proprietor or DBA he’s not required to have his own. Been there.

What state are you located. My business was a chapter S, not a sole proprietor. Laws differ in that respect.

 

[Jhenderson]

I’m in R.I. However, according to a search of W/C laws in N. C. , everything I’ve told you is applicable there also. A simple web search inquiring about W/C in N.C. is all it takes. W/C laws apply to all employers, whether they’re INC, Sub S, LLC, or Sole Proprietor. R.I. Is actually more stringent than your state. W/C comes to us with the FIRST employee, but also allows Corp officers to opt out. Sole proprietors are not allowed to insure themselves, unlike Inc. owners. That means the first guy I hire costs 39.5 % of payroll, while legally preventing me from insuring myself. That keeps me working alone. I sign W.C. release forms from both sawmills I work for. I also receive letters from our Dept of Labor advising me that I’ve relinquished any chance for W.C. claims by doing so. N.C. says total of three or more including corporate officers before it’s mandated. Basically allowing one employee before Ins is required.

 

[Sandhill Crane]

Long game; save, pay cash.

I would love to use a processor and cut my hours per cord from four hours per cord down to one, especially as humid as it was today.... However, if I borrowed to buy a processor, payments would leave me short of cash to buy logs. So I work with what I have because I'm under funded.
If I had a processor, on paper I could increase profits, but I would also have to borrow more to purchase a much, much greater volume of logs. It may even be worth it, but I'm not comfortable borrowing that much, even though I could if I used the house (our house not my house) for collateral.
Comes down to what your comfortable with. And, I'm comfortable where I'm at...in our house (which is paid for).
Besides, by me, fewer and fewer people use firewood in fireplaces and wood stoves, as more and more of my sales are small orders for fire pit wood. Pellet stoves and natural gas is much more convenient these days in newer homes and condos, for young and old a like. Insurance companies favor those alternatives as well.

We did make a, large for us, purchase on credit this year, replacing a car we bought new in 2005, with a new car. Zero percent, zero down, and a full tank of gas. Nothing fancy, but new was cheaper than financing used, we shopped hard on price, and, the money set aside for a car the past few years is still in the bank. We stuck with a basic plan, and said no to sun roofs, leather interiors, and loaded electronics, which were all very, very tempting to take home, with just a signature.

 

[Jhenderson]

That’s what known as living within your means. Our politicians could learn from you. As for a processor, I’m with you. Around here the market is shrinking while local tree companies have all bought processors. Now they’re in a race to the bottom as far as price is concerned.

 

[panolo]

NZ is different and has a certain lack of ambulance chasers and litigiously inclined, but that's changing unfortunately. It's a shame that some sort of probate period doesn't automatically extend to any claims against the estate or the potential beneficiaries where the latter can show they would suffer hardship until the estate /insurance pays out.

The bureaucracy is pretty insane here. Long story short I take care of my mother. She isn't old enough for SSI retirement but was working up until the day she had a couple strokes. It required 9 months between her hospital stay and her nursing home rehab. Pretty much her whole income from vacay, sick pay, disability, etc went to the state for that time. She was still left with a very large bill. I had to hire an attorney to keep the government off her assets and they still took there cut. She can never work again and it's a small miracle she can do what she does. It took over 7 months to get her deemed disabled by the government so she could draw disability. In the end they would not back pay that either. Once she received her dis pay than the state started taking almost $800 a month from a $1300 check for a medical spend down. I could have her awarded to the state and they would take care of her but she would have zero money when she dies as they would take everything. Instead I choose to care for her and pay most of her expenses. The most frustrating thing for me was sitting in a government office for the umptinth time and watching a "refugee" get full benefits when I was fighting for someone who contributed over 40 years of taxes through working and having them turn her down for a 3rd time. Don't even get me started on veteran benefits as I went through that with my father.

 

[muddstopper]

I’m in R.I. However, according to a search of W/C laws in N. C. , everything I’ve told you is applicable there also. A simple web search inquiring about W/C in N.C. is all it takes. W/C laws apply to all employers, whether they’re INC, Sub S, LLC, or Sole Proprietor. R.I. Is actually more stringent than your state. W/C comes to us with the FIRST employee, but also allows Corp officers to opt out. Sole proprietors are not allowed to insure themselves, unlike Inc. owners. That means the first guy I hire costs 39.5 % of payroll, while legally preventing me from insuring myself. That keeps me working alone. I sign W.C. release forms from both sawmills I work for. I also receive letters from our Dept of Labor advising me that I’ve relinquished any chance for W.C. claims by doing so. N.C. says total of three or more including corporate officers before it’s mandated. Basically allowing one employee before Ins is required.

I think you might want to read that again

 

[KiwiBro]

The bureaucracy is pretty insane here. Long story short I take care of my mother. She isn't old enough for SSI retirement but was working up until the day she had a couple strokes. It required 9 months between her hospital stay and her nursing home rehab. Pretty much her whole income from vacay, sick pay, disability, etc went to the state for that time. She was still left with a very large bill. I had to hire an attorney to keep the government off her assets and they still took there cut. She can never work again and it's a small miracle she can do what she does. It took over 7 months to get her deemed disabled by the government so she could draw disability. In the end they would not back pay that either. Once she received her dis pay than the state started taking almost $800 a month from a $1300 check for a medical spend down. I could have her awarded to the state and they would take care of her but she would have zero money when she dies as they would take everything. Instead I choose to care for her and pay most of her expenses. The most frustrating thing for me was sitting in a government office for the umptinth time and watching a "refugee" get full benefits when I was fighting for someone who contributed over 40 years of taxes through working and having them turn her down for a 3rd time. Don't even get me started on veteran benefits as I went through that with my father.

It's almost like the state wants citizens to break the law. So very frustrating that we can evolve to a point that society doesn't give a rats ass about equitable outcomes.

 

[Jhenderson]

I think you might want to read that again

Please highlite my error along with attribution to the source. I searched W/C regs by state and used the NFIB website which gave the basic requirements.

 

[muddstopper]

I’m in R.I. However, according to a search of W/C laws in N. C. , everything I’ve told you is applicable there also. A simple web search inquiring about W/C in N.C. is all it takes. W/C laws apply to all employers, whether they’re INC, Sub S, LLC, or Sole Proprietor. R.I. Is actually more stringent than your state. W/C comes to us with the FIRST employee, but also allows Corp officers to opt out. Sole proprietors are not allowed to insure themselves, unlike Inc. owners. That means the first guy I hire costs 39.5 % of payroll, while legally preventing me from insuring myself. That keeps me working alone. I sign W.C. release forms from both sawmills I work for. I also receive letters from our Dept of Labor advising me that I’ve relinquished any chance for W.C. claims by doing so. N.C. says total of three or more including corporate officers before it’s mandated. Basically allowing one employee before Ins is required.

3764"]Please highlite my error along with attribution to the source. I searched W/C regs by state and used the NFIB website which gave the basic requirements.[/QUOTE]

http://www.ic.nc.gov/NCICWorkersCompPresentation.pdf

It has been at least 10 or 12 years since I had to deal with all this and I aint interested in researching RI laws to see what differences there might be. But some of the statements in your post are not accurate for NC. You state that Sole Proprietors are not allowed to insure themselfs in RI. In NC Sole proprietors are not automaticly counted as an employee, but may be included if they meet certain requirements. Corporate offices may elect to be excluded from insurance coverage, but they are still counted as an employee when it comes to the 3 person count for requireing coverage.

Sawill and logger workers comes under a whole different set of guidlines. I believe you mentioned working for a couple of sawmills, so you may or maynot have a different set of rules to go by.

You also mentioned something about a casual employee in one of your post. Me hireing the farmer to do the actual work required to complete my contract, makes him a full employee as he is actively engaged in my work being done, even if it was only for a couple of hrs. The rules plainly state, Who is an employee?  Every person engaged in employment  Appointments, contract of hire, apprenticeships  Express or implied, oral, or written.

You have also mentioned the state doesnt sale the insurance, on that fact you are correct, but the State does set the rules and requirements for the coverage and the State can enforce those rules on the employer with fines, criminal charges, ranging from misdemeanors to felonies, and even imprisonment. While the State cant cancel your coverage, the insurance companies will not sell you a policy unless any fines or penalties have been paid. They will send you bills for those penalties too, you can trust me on that because I got a few before I agree to pay them.

Bottom line, the State considered the farmer I hired as an employee that was required to have WC coverage, and as his employer, I was required to provide proof that he had his own coverage, or provide coverage for him. He wasnt actually a farmer, just a old guy that happen to own a farm tractor to till his own garden with, that was located next door to a job I was doing. Now I am not saying that somewhere in all those state rules there may of been some exemption I could have used to not have to pay for his insurance, but the penalty was certainly cheaper than hireing a lawyer to find the loophole.

 

[svk]

but here it seems lawyers and legals get their fingers in everything.

Absolutely. A lawsuit means thousands. If it gets into arbitration it means tens of thousands.

Kind of like divorce attorneys who will purposely pick a fight with the other spouse so the attorneys can fight it out and each of them charges 250-500 an hour.

 

[svk]

Getting back to financing, I guess maybe I am more gutsy or maybe just more foolish than some. When I needed business capital the banks would extend a small (high 4 figure to low 5 figure) line of credit to me but beyond that I needed to dip into home equity. Being self employed is great and it is also horrible depending on the day, it is definitely not something that works for everyone. You just need to be sure to win more than you lose But I tell you that I never went into a business deal where failure was an option.

If the OP has significant capital from his existing iron to trade in then at least he has some equity in the new machine. If SHTF and he needs to sell his equipment then he should be able to walk away from the deal even up or maybe a bit of cash in his pocket.

 

[chucker]

in my book if you cant pay cash for it you don't need it.... use what you already have till it drops off the frame! when needing to buy, never use more then what you have saved for in the second redundancy emergency fund! I "WOOD" never use my homes security as a finance fund period!...…...

 

[Jhenderson]

3764"]Please highlite my error along with attribution to the source. I searched W/C regs by state and used the NFIB website which gave the basic requirements.

http://www.ic.nc.gov/NCICWorkersCompPresentation.pdf

It has been at least 10 or 12 years since I had to deal with all this and I aint interested in researching RI laws to see what differences there might be. But some of the statements in your post are not accurate for NC. You state that Sole Proprietors are not allowed to insure themselfs in RI. In NC Sole proprietors are not automaticly counted as an employee, but may be included if they meet certain requirements. Corporate offices may elect to be excluded from insurance coverage, but they are still counted as an employee when it comes to the 3 person count for requireing coverage.

Sawill and logger workers comes under a whole different set of guidlines. I believe you mentioned working for a couple of sawmills, so you may or maynot have a different set of rules to go by.

You also mentioned something about a casual employee in one of your post. Me hireing the farmer to do the actual work required to complete my contract, makes him a full employee as he is actively engaged in my work being done, even if it was only for a couple of hrs. The rules plainly state, Who is an employee?  Every person engaged in employment  Appointments, contract of hire, apprenticeships  Express or implied, oral, or written.

You have also mentioned the state doesnt sale the insurance, on that fact you are correct, but the State does set the rules and requirements for the coverage and the State can enforce those rules on the employer with fines, criminal charges, ranging from misdemeanors to felonies, and even imprisonment. While the State cant cancel your coverage, the insurance companies will not sell you a policy unless any fines or penalties have been paid. They will send you bills for those penalties too, you can trust me on that because I got a few before I agree to pay them.

Bottom line, the State considered the farmer I hired as an employee that was required to have WC coverage, and as his employer, I was required to provide proof that he had his own coverage, or provide coverage for him. He wasnt actually a farmer, just a old guy that happen to own a farm tractor to till his own garden with, that was located next door to a job I was doing. Now I am not saying that somewhere in all those state rules there may of been some exemption I could have used to not have to pay for his insurance, but the penalty was certainly cheaper than hireing a lawyer to find the loophole.[/QUOTE]
Casual labor is just that. One of the differences between an employee and a sub contractor is equipment. He supplied his own equipment. Another is supervision. Did you tell him how to do the job, or did you simply state what results you required? Those are two of the basic litmus tests of sub contractors.
I quoted N.C. regs. I didn’t say a sole prop wasn’t allowed to purchase W/C in your state. I said in mine. I also said up to 3 employees didn’t require W/C. I also said Corp officers were counted even if they declined coverage. I fail to see where I mis quoted the regs in your state.

 

[Sandhill Crane]

Business fail for all kinds of reasons.
Two of the top ones are lack of funding, and another is too much debt.
My brother-in-law co owned a business selling castors to companies. They were used in all types of products and also in house for warehousing. His was a small company, and could get parts and do custom assembled orders with specialty wheel types, brakes, mounts, weight classifications, etc. with quicker deliveries than larger suppliers.
He retired at age 42, and unfortunately passed from cancer ten years later.
He did not own anything business related, and rented or leased everything, from vehicles, a building, to computers/printers and phones, as the technology changes too quickly. In other words, among other things, he kept his debt low, and at the same time kept on the leading edge as a business, with virtually zero expense to maintenance and up keep. Out grow a building, you move. Need more help for a week or a month, call a temp service.
So Valley Firewood: getting back to loans, maybe leasing a processor is an option.

 

[Jhenderson]

Leasing long term assets has its up and downsides. The effective interest rate being one. The others being the buyout at termination and possible charges for wear and tear. But it does preserve capital. The other problem for the OP is he’s looking at trading in a machine. It’s possible that the trade could be used as either to lower the lease payment or it might be used to lower or eliminate the buyout. Either way the wording of the lease has important tax implications. The IRS checks closely to be sure it’s what they consider a true lease and not actually a loan in disguise. The primary difference being lease payments are deductible while only the interest is on a loan.