Lease/Buy/Finance_How-much-&-How-Long

[SkidSteerMarks]

I'm buying my first wheeled John Deere Skid Steer Loader for my landscape company. Previously rented. Just can't make any worthwhile money, severely impact profit margin.

Wife and I got approved through small lease finance company in PA @ 24&(APR) and 15% simple interest. Payments are 581.00@mo; 48months, $2373 in interest paid and the end of 1yr period of the 4yr loan. We will be paying off the loan in 12months just to establish business credit. We have the cash to buy what we need but didn't want to tie up that much operating capital. Anybody had any experience with smartcredit.com and U.S. Funding Services 561 FONT ROAD DOWNINGTON PA 19335 484-879-1802.

Really would like to hear any constructive thoughts on the matter.

 

[Parkanzky]

I don't know anything about the finance company, but that interest seems usurious to me.

 

[kenmac]

Well, It's going to cost you over 2 grand more $$ to finance

 

[Citydude]

Did you try your local bank? Same as you, I'm a small business owner and my bank gave me very favorable rates on my equipment. No where near 15%.

 

[MinnesotaEric]

I'm buying my first wheeled John Deere Skid Steer Loader for my landscape company. Previously rented. Just can't make any worthwhile money, severely impact profit margin.

Wife and I got approved through small lease finance company in PA @ 24&(APR) and 15% simple interest. Payments are 581.00@mo; 48months, $2373 in interest paid and the end of 1yr period of the 4yr loan. We will be paying off the loan in 12months just to establish business credit. We have the cash to buy what we need but didn't want to tie up that much operating capital. Anybody had any experience with smartcredit.com and U.S. Funding Services 561 FONT ROAD DOWNINGTON PA 19335 484-879-1802.

Really would like to hear any constructive thoughts on the matter.

1) First, have you spoken with your local banker? If you have a good enough down payment, enough for a banker to consider you have enough skin in the game, the banker should be willing to lend you money at 7-10% interest rate for a new venture without established commercial credit.

2) Second, failing a straight up lease or loan through your local bank, do you have collateral in real estate you can use to purchase the equipment? Interest rates have been going up the last seven weeks as bondsmen front run an anticipated Federal Reserve interest rate hike later in the year, but from a historical perspective, rates are still silly low.

3) The only reason you could expect to pay such a high 15% rate is if your credit rating stinks, and you have too little of money down on the equipment (even if it is a lease or loan).

4) Not all lenders are willing to write notes against heavy equipment but there are many companies that do nothing but. Find more of them and get quotes.

5) FWIW, a year ago I did a massive brain fart on personal credit in a thread about leasing or buying. That information may help you.

http://www.tractorbynet.com/forums/...isons/309660-lease-vs-buy.html?highlight=FICO

6) If you can still cash flow well enough even with a high interest payment, you should go for it, remembering as you do that controlling expenses boosts your bottom-line.

 

[northSun]

Looks like Deere would give you 0% for 48 months on a new one--may be a better option than that rather excessive interest rate: https://www.deere.ca/en_US/buying_and_finance/usa/special_offers/construction/construction-offers.page. They are also offering 3.9% on Deere certified used (see bottom of linked page).

 

[rtimgray]

What about an unsecured personal loan? Discover was offering up to $30,000 at 3.9% with a 48 month term. 15% sounds shockingly high to me, but maybe it varies by geography.

Good luck and take care.

 

[SkidSteerMarks]

Had to get going quick need to fix my business credit.

 

[SkidSteerMarks]

See you're a cummins guy too you're alright with me. Cummins rules. Thank for the reply.

 

[SkidSteerMarks]

I got turned down last year by deere for the amount I need still a little salty bout that. Maybe next skidder will be the JD_CT332. Bobcat's reputation seems a little inflated. John Deere seems not to focus so much on doodads an such.