purchasing equipment????

[tree guy 76]

I have been in the industry for 11 years and am finely thinking of starting my own business would like some advice on equipment financing. I am looking at starting with a bucket truck and chipper and then buying a forestry mower after I get going. The banks I have talked to want 2 years financial documents on the business to loan money for equipment and then want a 40% down payment. I am just wondering if a lease is a better option or just saving more money to buy them outright in a couple years. For all of you that do not like bucket trucks the only reason I need one to start is the contract I am looking at requires a newer bucket truck and chipper. I would appreciate any advice you guy could give me. Thanks

 

[antigrassguy]

Way back when we started on our own my wife made the comment that its not so much what ya know about trees, but what do ya know about overhead. Dont stop with just one bank, you are getting bids so talk to all of them. Also talk to the lease folks and see what they require as far as terms, maintenance(whos responsible for what?), buyout programs and length to get a better feel for that. Me personally am a buy it guy, but there are many advantages to leases. Talk with your accountant, ya, youll want one of those as well. Also talk to your insurance person to get bids on insurance as well. Also figure for employees wages and work comp and FICA and all that fun stuff. Stick with it though as you will learn a bunch the first few years and once you streamline your operation its all worth being your own boss and in charge of your own future. Good luck

 

[bottlefed89]

Agreed, I like to buy it... I always try to plan a reasonable life for the machine, and plan the best time to resell before I get in to any machine. Things will defenitly change, but it helps to have a plan. I have a lot of equipment, and I've always bought used in the past, but I never really run things into the ground, I'd rather sell when they still have some value. This year I made some business moves that were fairly large for me, the 13th bank I met with works well with me. They basically want to know your life story, and then some. I bought an existing business at the same time that I bought some equipment, and refinanced some stuff I already had. By the time things were done, I had a business plan/proposal that was well over 100 pages, which documented all of my business, documented all of the other business pasts operations, and spelled out my plans for both businesses. My point.. do your homework, look professional, and don't keep it a secret that you're looking elsewhere. Unless you've really screwed up your credit in the past, you should be able to finance equipment without putting 40% down..

 

[tree guy 76]

Thanks for the advice. Sounds like I need to do some more shopping around with other banks. So far I have only talked to a couple local banks and the one I do all my personal financing through. The only problem right now is that I work about 70-80 hours per week for my present employer. Salary, you know how that is. Thanks again guys.

 

[Husky372]

Alot of the lease financing for equipment is really a loan to buy. But being a lease they can charge $$$$ for the financing. Most banks do want you in business for 2 years before they will loan. So a lease can be best way to get. Or go through equipment manufactors finance company. I did lease and will say that you better read contract well becuase I didn't and even if I want to pay off early I am still going to have to pay everything back. There is no pay off early and save some finance charges. Live and learn. Sometimes when your not to bright like me it cost alot for that education.

 

[Oly's Stump]

Starting out is tough. Once you have an established business you will be getting calls all the time from equipment fianace companies. I recall starting out buying equipment with a high interest rate of lease to own. Now that I have been in business some 19 years I can get the best rates with little down. If you work hard and have a ligitimate business it wont be long before you wont have problems getting fianancing.

 

[GlennG]

Do you really need a bucket truck to start? Can you climb? In my area buckets work with less than half the trees I bid because of access ( back yards , fences, power lines etc. ) Bucket trucks are maintenence hogs and insurance is sky high. Can you keep a bucket working every day? When you buy a bucket your profitability will go down .

Though I`ve used buckets while working for other tree services I think they are exspensive and over rated .


Glenn

 

[maxburton]

You should have a business plan before you start out on your own. A business plan with show you the numbers and tell you whether or not you'll make it. You generally need to be running a piece of equipment three or four days a week to justify buying one.

As far as financing goes, I had a lot more luck with equipment financing through the dealer rather than going to the bank. I have decent credit, so they didn't even want to see my bank records or anything like that.

 

[Newfie]

You should have a business plan before you start out on your own. A business plan with show you the numbers and tell you whether or not you'll make it. You generally need to be running a piece of equipment three or four days a week to justify buying one.

As far as financing goes, I had a lot more luck with equipment financing through the dealer rather than going to the bank. I have decent credit, so they didn't even want to see my bank records or anything like that.

Banks want to see a plan and/or a history. Dealer financing has been the route I chose. It's almost like they want to give the stuff away. When I started my business, I didn't need any co-signers, income documentation,business plan and the rates were better than any of the banks. Folks that manufacture the stuff understand the business we are in better than any bank.

 

[Koa Man]

Do you really need a bucket truck to start? Can you climb? In my area buckets work with less than half the trees I bid because of access ( back yards , fences, power lines etc. ) Bucket trucks are maintenence hogs and insurance is sky high. Can you keep a bucket working every day? When you buy a bucket your profitability will go down .

Though I`ve used buckets while working for other tree services I think they are exspensive and over rated .


Glenn

He needs one for the contract he wants to get. I would get something along the lines of a Spider Lift. Far more versatile and you will be able to access more than 5 times the trees that a bucket truck could. Only thing is they are expensive. If a bucket can get to all the trees you need to, then by all means get a bucket....they are faster.

 

[tree guy 76]

Sorry, I should have explained better why I need a bucket truck. I have been a general foreman for a large line clearance company for the last 8 years, and yes I can still climb. The contract is with a small utility company that my company doesn't want to work for because it is only 2-3 trucks and chippers and maybe one forestry mower. I currently do all the bidding on contracts for our company so the finacial part I already have figured out. I will make a little more money with my own company but probably not much more. Probably 80% or more of the work I would be doing is on the road so much quicker with a bucket truck. Is there a website where I can see the spiderlift? One of my main problems is locating a dealer close to Kansas City. Most of the dealers I have found are 800 miles from here. If anyone knows of a dealer near Kansas City let me know please.

 

[foodforests]

70-80 hours a week?! If you take a day off a week, that means you are working like 12 or 13 hour days. That's too much! I assume you are using deadly equipment the whole time.
Don't work so much, man. Its only money. Take some time to play with your kids or your dog or go out with your wife or something.
Good luck with your new venture!

 

[tree guy 76]

I wish I could take more time off but if I want to keep my job I'm pretty much required to work all the time. I have 27 employees that need a constant baby sitter and 6 power company representatives that make me be on call 24 hours a day 7 days a week. We do allot of storm restoration work which requires long days and travel. Last year I took 45 of our guys from Kansas and went to work in Alabama on 2 occasions. Wouldn't mind to visit Hawaii sometime never been there before. But unless you have a big storm and allot of boats probably wont be there anytime soon. By the way don't have any kids but do have the wife and dogs I could play with.