trouble on tractor financing

onegreenday · Oct 29, 2004

I cut up my credit cards 10 years ago and went cash only.
Now I can't finance a tractor because I have no established credit lines.

I have $5k to put down on a tractor & loader.
I need the tractor for my new business.

Any suggestions for a "hard to finance" tractor buyer?
Thanks for any help.

bczoom · Oct 29, 2004

( I need the tractor for my new business.)

How new is your business? Have you looked into a commercial loan?

btolle · Oct 29, 2004

Depending on how much the price of the new tractor is $5K may be enough of a down payment to overcome the lack of credit history.

Look at it from the lender's viewpoint:

If you are purchasing a $20K tractor and putting $5K down that is 25%. Anyone who has $5K invested is likely to keep the payments up because they will lose their $5K if they don't and the lender will own the tractor at 75% of market value so they should be able to cover the loan if they repossess.

The only other problem you may have is if you are self employed. In that case be prepared to present a financial statement including at least the last 2 years of tax returns.

Don't assume you can't get financed because of lack of credit history. With a big enough down payment someone will finance it for you.

thcri · Oct 29, 2004

Self employed!! Yes, when you are self employed the financing becomes a whole new strategy. Not having credit cards for a while doens't help either. Getting rid of your credit cards was probably a good thing but it does have drawbacks. My wife and I have credit cards but the day we can't make the whole amount payment from the month before is the day we rip them up also. So we do use them to keep our credit rating going. One thing you could do is to look at a lease. In the long run it may cost you more but you might have a better chance of getting started in your business.

Just a thought!!!

murph

ByronBob · Oct 29, 2004

Boy do I wish I had these types of problems. /forums/images/graemlins/smirk.gif /forums/images/graemlins/smirk.gif

I would try your bank. They should be willing to extend you credit if you've been doing business with them long enough. I know in the past for myself the bank although they don't have the greatest rates will give you less trouble if you have a long standing relationship with one.
Another option if you are in one is a Credit Union.

bczoom · Oct 29, 2004

( Now I can't finance a tractor because I have no established credit lines.
I have $5k to put down on a tractor & loader.
)

onegreenday,
How much is this new tractor?
Was it the dealer that said they wouldn't finance?

Dargo · Oct 29, 2004

The first thing you need to do is get a copy of your credit bureau. Most lenders seem to use Trans Union, although there are several available, and that is the one I'm most familiar with. Part of my consulting business deals with training auto dealerships how to get good people who have run across bad circumstances financed. I'm not talking about being financed at "loan shark" rates, but actually financed at a bank.
If you get a copy of your TU credit record, and you can get one online free or for a nominal amount, PM me and I can give you my professional opinion on how to proceed.

BOTAMAN · Oct 29, 2004

I have encountered some difficulty getting some of my customers financed, who did not use credit cards and had paid cash for everything. I was able to get them approved by using the electronic funds transfer option for their monthly payment.

onegreenday · Oct 29, 2004

I wanted to buy a Zetor 4341 with l02SLX loader for $25K with 5k Down (got rejected) but I think I may start my business with a cheaper tractor ($15K) and put 30% down ($4500).

MY local NH guy said he was pretty sure he could do that. I'm not keen on the NH so I might sit tight for a while or seek other alternatives.

Thanks for ALL the quick imput. Gotta love the web......

KiotiJohn · Oct 29, 2004

If you don't belong to a credit union, join one. They are much more likely to extend you credit than a bank.
With that much downpayment, you probably won't have a hard time getting financed.
If you want to start getting some credit to buy later, go to that credit union, and open an account that will be frozen for at least $1000.00. You'll make monthly payments on it,for at least 6 months, and then pay it off and get the $1000.00 back. In the meantime, you've established that you can make payments on time and will have some good credit on your report. It's a great way to get started, and it only costs you the amount of the interest, which is usually less at a credit union. John

demote · Oct 29, 2004

Last year when I bought my tractor, several (John Deere, Mahindra, Kibota all had 0% interest. I think some of them are still doing so. Since you haven't settled on a tractor, then you should be able to shop for hungry dealers.

EastTexFrank · Oct 30, 2004

It's tough to live in America without a credit rating isn't it? I ran into the same thing when I came to the States in 1985 ... no credit rating. I couldn't get a mortgage or anything else unless I paid cash and some places weren't all that keen to take cash ... figure that one out!!! Even the one and only credit card I'd ever owned, Amex, didn't help much as it wasn't classified as a "credit" card since you pay off the balance every month. Thank goodness for my wife. She had to sign for everything.

The advice I got from other ex-pats who had run into the same thing was to do exactly as KiotiJohn suggested. The only thing was that back then interest rates were about 15%. It really broke my little Scottish heart to pay a bank 15% to borrow my own money in order to establish something I didn't think I needed. Ah well, it's the price we have to pay for living in a credit orientated society.

onegreenday · Nov 6, 2004

Good news! New Holland said they'd finance me with 20% down. 4 years at 0% interest.

Their tractors seem to be about $3-4 thousand more than Kioti, Zetor or Mahindra tractors of equal spec's; so that hurts a little.

But NH can do the deal and the tractors seem to have an OK rep on these boards; so I might have to bite the bullett on the xtra money.

NH must have more liberal financing requirements than Agricredit Acceptance LLC; which wouldn't finance me.

dsgsr · Nov 8, 2004

Thats because the NH will have a better resale value than the other three.

David

rockyridgefarm · Nov 8, 2004

Not to muddy the waters but have you checked with Deere and Kubota also? I know JD Credit has been very easy to deal with...

But NH is a fine setup, if you go that way...

Dargo · Nov 8, 2004

The big three keep being the big three CUT tractor companies with the help of their finance acceptance corporations. Similarly, you don't think that the finance arm of GM, Chrysler, and Ford keep selling vehicles for them?? There is a reason that they generally retain about 30% of dealer financing, and it isn't always because they have the lowest rates!!

The tractor companies who want to be considered with the "big three" will have to come with their own finance companies or they will never crack into that level of sales or market penetration. Just look at what Toyota, Honda, and Nissan discovered about 15 years ago. They didn't at first have their own finance companies. Do you think they do now??? /forums/images/graemlins/wink.gif I know that tractors and cars / trucks are not exactly the same, but economics 101 is!

sneaky_pete · Nov 9, 2004

( ...It really broke my little Scottish heart to pay a bank 15% to borrow my own money in order to establish something I didn't think I needed.)

Frank,

Where are you from? My wife is from Hamilton, Lanarkshire.

Pete

EastTexFrank · Nov 9, 2004

Pete, I PM'd you. Check "My Home".

Soundguy · Nov 9, 2004

( The big three keep being the big three CUT tractor companies with the help of their finance acceptance corporations. Similarly, you don't think that the finance arm of GM, Chrysler, and Ford keep selling vehicles for them?? )

I agree.. it is almost 'in house' financing.

Ford financed my first ford tractor.. and wanted my 2nd one.. but my bank beat them pretty good on the interest rate this time.

Soundguy

onegreenday · Dec 20, 2004

Kubota said no to financing me. Only New Holland would finance me so far(no credit history).

New Holland wanted 20% down ($5,700) on a TN60A (selling for $28,500 with loader) but would take $4,500 down (less than 20%) on a TN65 (old style) (selling for $26,700)

Have not tried JD yet.