Well here is the story. I have found a Killer deal on a JOHN DEERE 310 Super E. 4x4 extend-a-Hoe Cab. 4900 hours, really nice shape, 65% rubber. $22,500. Well I go to my bank. Show them my 3 year snow contract for a Huge Mall here in maryland. Which includes one of their largest banking centers. Blah, Blah, Blah. So they run my credit, which is freaking great for a 21 year old. But tell me, No because I haven't been in business for more than 2 years. ARGH. That they only long money out based on gross from the year before. Ok they makes a heck of a lot of sense right? :Banghead So let me get this straight. I can't borrow money to make more money, that will get deposited back in your company. mmm ***!!!!!!!!!! Plus I got a big contractor who flat out told me, if I get it, he will keep it busy for me at lease 30 hours a week. So anyways. I have talked to a couple of equipment financing companies. All which are willing to loan/lease the backhoe for me. Does anybody have any suggestions of a good company to deal with? Or tell me why this country does stuff so backwards.
Try several different banks. They are not all the same and some smaller local banks will loan when the big ones won't. Next time you get paid off a large account deposit all the money in savings then take a loan out aginst the savings account, (Banks will uasualy give you the loan @ 1% inturest above the interust the savings gets.) ust the loan proceeds to pay your bills. If times get short you can pay the loan payments from your savings but otherwise make normal payments on it. It builds credit fast, puts money in savings, increases your co. assets, and makes you a good customer with the bank. another thing is banks will loan money a lot faster if you don't need it. so the next time you are ahead barrow from the bank and put it into savings for a later date. I went through what you are going through 25 years ago and it took at least 5 years to prove I was a good risk. all the time with perfict credit.
See the black button right beneath the American flag above? That's Finance Guy, one of our sponsors. I can't say whether the rules he has to work by are any different than the rules of the bank you talked to, but since he helps Steve to pay the bills around here, I'd be remiss if I didn't suggest that you see whether he can help. :thumbsup
Not to discredit the advertiser I have used a company by the name of Western Finance. They have done me well so far. I did work with Joel dont remember his last name though. They are smaller so shouldnt need it anyway.1-800-451-7087 They get very competitive quotes but if you tell them you are going to shop it than they always have some "program" they are introducing that will get you lower rates. Things went pretty smoothly for me and the dealer said it went well for them.
Join the club our banks are no different now that I'am working for a company I finally have a chance to get a bank loan. When I was self employeed I got turned down it was a pain in the azz especially when a person making 10 dollars per hour could get a loan because the bank said he had a "steady job". No my work wasn't steady but I still made more money that the person that makes 10 dollars per hour Lets just say I was a little What Dwan meantioned going to borrow money for no reason and paying it back was meantioned to me and the rest of my class in highschool by a teacher back in 94. He said it builds credit then when I seen Dwan meantioned it in another post not this one it reminded me of it. Good Luck
I'd second what digger suggested. I talked to finance guy several times this last spring about financing or leasing a t-250 bobcat that I had found. Although the machine sold before I could even submitt the paperwork to him, he was very helpfull, and had numerous programs available. The next machine that I look to purchase, he'll definately be getting a call!
Just my luck. He didn't pick up the phone. :Banghead Oh well. Hopefully he got my message.
Hmmm odd you have a large contract,you have assests and good credit.....Banks I'll never understand them Do you think its due to your age?,some reason I have a feeling that has come into play.
its funny i wanted to buy a used ford dump for 13k from a dealer no dice to high of intrist so i went to my bank and they gave me the runaround to i think i was 21 at the time so i went to another ford dealer and they sold me a brand new truck at 7% and no cosigner and off i went 10 trucks later from the same dealer and they were happy to sell a kid a truck many years ago dont give up someone will loan u the money o by the way we have a guy up here in philly that loans money but dont be late or he will :thumbsup burry u
His age may have a little to do with it but when I tried I was 35. It is not all age.
The banks I have dealt with have just come right out even before running my credit and say I am to young and it is doubtfull( I will be 21 in under 3 months) I have perfect credit, contracts, and a lot of cash to put down on loans but still no luck yet. Dusty where is this guy at in the philly area? i live in the suburbs
In Philly, there's probably one on every street corner... :wink2
Try CNH capital I just used them on my excavator that I just signed the paperwork yesterday for. They had better rates than my bank. My bank HSBC wanted me to not only use the machine for colatteral but wanted a blanket lein on everything I own and future assets. Look for fixed rates and standard term note 48 months. You should be able to find a note for 10% or less. Have you any loans from other banks? Call them first.
I also called John Deere finacing. They said they where willing to give me a loan on any used JD equipment. But they haven't gotten back to me on any rates or offical yes yet. So I know I got someone willing to give me money now. Plus I got a friend who offered $15,000 to me if I needed it. Only problem is then I am her person bitch till further notice. :eek2
i could use a whipping boy for a while do u want some money :slomo :slomo
Hopefully you'll have good luck on that hoe (The John Deere not the woman:wink2 ),for that price she's worth the butt kissing :yup
I will be glad to be a personal bitch for 15K!:notworthy :yup
I would be looking for the one that will give you the 15k and not make you their personal......huh hum......assistant.
Some of you may have seen my post regarding our Kenworth Hooklift we built this summer. Well, that truck taught us a lot about banks. Prior to the Kenworth our largest purchase was a $45,000 used EX 200 that a leasing company took care of us on when we were in business for about 16 months and very little money. So we go to the bank that we’ve have been with since the beginning, at this point we have passed roughly $7 mil through there doors in five and a half years, no bounced checks, no overdraft just a good bank customer. We met with the loan guy to request $160,000 to build the truck. We came with all the requested docs P-L, balance 3 years tax returns, etc, etc, The first thing he looked at was our net worth work sheet, spotted $15,000 in credit card debt and said “That’s a problem†and I am thinking what the hell, We have over a $100k available but only used 15%? I am sorry I don’t remember his technical reason for not placing the loan but he did review the other docs but not until we were denied and he actually said our business looked pretty good but sorry! We went to another local bank at the suggestion of a friend and this Bank “MT RAINER NATIONAL BANK IN BUCKLEY WASHINGTON†Reviewed our docs and within 15 minutes said yes I think we can do this and committed the following day. My old bank that was very unsupportive of a small growing business by the way that bank is “Venture Bankâ€. Any ways Unsupportive Venture bank spends a lot of money on marketing in business journals tooting there horn about how the bank was started by business owners tired of getting treated poorly by banks. I could go on and on but I will finish, so I sent the ceo of Un supportive venture bank an email basically saying the same thing I am telling you and have yet to get a response and that was 4 weeks ago.
Not about equipment but still pertains to financing. I have excellent credit and this was proven when I bought my new house (150k+ for estimates) and was asked jokingly by the bank if I would like another one also. Well, I go to one of the major building supply companies to buy a washer, dryer and refrigerator. I bought the washer and dryer with cash and wanted to finance the refrigerator. The fridge was app. $1400 but they said the best they could do was let me finance $200 and pay the rest in cash . Its ok though because the competition got my buisness by financing 100%:yup . I mean how much credit you gotta have to buy a freaking refrigerator? To top it all off, I was able to finance the ol' lady a brand new car to go with her brand new house:crying . I have worked hard to have nice stuff and good credit and find it very offensive to be turned down. I guess I don't understand credit like I thought I did .
That has always been the hardest part was to get finacing. Being self employed seems to be a black flag for most banks. The thing is, this country was built on self employed people. The worst people to deal with are the banks you use every day for checking, savings account etc. Then insurance companies. Oh don't get me started:Banghead
i know there are those who prefer large banks. personally, i like banking in a small bank, i'm in south dakota, and are quite a few of them. my loan officer is the only one in the building, and i've known him for about 15 yrs. he knows me personally, knows my character. i'm sure that's bought me some loans that larger banks would have shyed away from
Dayco I wish we had some small banks left. I started with a small bank and they were bought out by a giant bank just like every thing else around here.
Lending Institutions are a joke. Here's a good one. Last October 2005, I got the lame-brained idea to go down and work in Gulfport, Ms. in the Katrina debris cleanup scandal. I worked feverishly 24/7 to prepare to go, given I had a "contract" from a disaster response company, and a seemingly solid connection down there. I needed 2 40' frameless demo trailers, FAST. Got a lead from a friend who referred GAC Capital in Safety Harbor, Fla.(Safe harbor for them, evidently...) I needed 90K for 2 trailers that a dealer was holding on my WORD, no money exchanged. The shyster at GAC approved my loan, and said it would be funded in 2 days. They requested a 3K dollar downpayment for processing, etc. and faxed me a contract with 3 out of the 9 pages conveniently smudged so I couldn't read them. I had the dealer prepping the trailers, thinking I'd pick them up by Friday of that week.I get a call from a GAC underwriter on Thursday, giving me a phone interview. After 20 minutes of interrogation, he mentions that he will need my HOUSE as collateral. I stated that had they mentioned this within the first 2 minutes of our initial conversation 4 days ago, I would have hung up on him. I am incorporated, and by no means was I going to use my house for collateral. That was the end of the game, and when I mentioned I'd be expecting my 3K back, he said "did you read the contract, we consider that downpayment as "earned" for processing fees, etc". I called the president of that rip-off outfit, and he did the same thing, NOTHING. I blessed a lawyer with 200 bucks to write a letter to them requesting my money back, but got nowhere fast. The part of the contract that was smudged was the part that explained the "earned" processing fee part. Moral to the story: "He who cannot read smudged faxes is a complete moron"...But God help the necktie-wearing SOB that runs/owns that rip-off felonious company if I ever was introduced to him face to face...I'll give him my personal "double your money back gurantee" that he'll never look the same again as long as he lives, if I decide to let him... I ended up finding a used,less expensive trailer, went down there as planned expecting to make a killing as originally anticipated, and stayed 8 weeks out of the 6 months that was supposed to be executed in the "contract".Work came to a screeching halt when I arrived due to contract negotiations, fraud claims, dishonest politics, FEMA problems, etc. Most guys that fell into that trap like me lost a whole lot, unfortunately. People financed equipment, trucks, skidsteers, etc. against their homes, and unfortunately lost everything.The corruption that took place in that mess down there took a lot of good people down in the process.I guess I can consider myself fortunate compared to some...
Sorry to hear that . Some lenders are crooks that need to be reported to the reglatory commission . The fact they asked for $3K up front should be a red flag. Hope everything turns out ok for ya. doug
Dredging up an old thread to share a story My father in law moves out here to the "country" to buid his retirement home..he has spent 45years as a successful lawyer in the DC/Metro area and now at the age of 68 he comes down here and buys 2 acres of land in a gated waterfront community and pays cash...goes to the bank and applies for a mortgage to build a house on his lot and gets DENIED on the basis of not having enough "liquid assets"...this man hasnt been denied financing once in his LIFE EVER and takes personal exception to this so he sells some stocks and makes a few transfers and re-applies for the loan with an account balance at the same bank of nearly 5x the amount he wants for his mortgage the bank falls all over themselves to approve this time and he goes into final closing to sign the papers...when they pass the contract over to him he tears it in half gets up and walks out telling them exactly what he thinks of the loan officer that denied him without fully checking into his financial statement the first time..to add insult to injury he transfers all his money back out of the bank and closes his accounts..then he literally walks across the street to the competition and has his loan approved the same day..as a final insult the president of the first bank got a hand delivered invitation to his house warming party when the house was completed...he didnt show up tho :crying :bouncegri Sorry for the long post and no it has nothing to do with equipment but it just goes to show you that not only 21year olds and self employeed folks get d*cked around by banks...:bash
If it makes sense, we can finance it! You say that you have receivables from a job that you will get if you can get the equipment? Then what you need is what's called "Factoring".
Welcome to HEF Richfowl! :drinkup
The major things you need to know about banks and any lenders of money .. are .. 1. They will fall over themselves to lend you money, when you don't need it .. and then deny you a small loan to see you out of a tight spot .. 2. They generally have the right to recall at outstanding loans .. in full .. at 48 hrs notice. They do not not need any serious reason to do so. A bank destroyed my business, and all my lifes work (30+ years of gut-busting effort) by demanding repayment of all outstanding loans, within 48 hrs. The reason? They had done some "forward computer projections - that showed I would possibly, not be able to pay my debts, in 6 to 12 months time" .. " :guns As a result of their decision, all my assets were sold at fire sale prices. Not one other bank would take my business on, when they learnt that my bank had shut the door on me .. even though I had been in business more than 30 years, had a $15M annual turnover, profitable business, with 55 items of equipment and 65 employees .. and several hundred successfully completed finance contracts. I could have taken them to court, and tried to fight them .. but who's gonna win? .. when they have $50 billion in assets and I've got $2.5 million?? .. and they can employ the biggest team of commercial lawyers in the country, and just wait until I run out of money .. ?? 4. The easiest way to get quick finance is via a credit card .. banks will bend over backwards to give you $15K in TOTALLY unsecured finance on a credit card .. and you can get several, with ease .. but you would not be able to get a $10K loan to finance an item of equipment, from the same banks .. :Banghead 5. Never trust ANY lender! .. and the ones in big glass, concrete and steel buildings, are just as rapacious .. if not more rapacious .. as the ones who operate on the back streets of Philly or Chicago! .. they just use different enforcers, that's all .. 6. NEVER let ANY finance institution demand MORE assets for security .. than what the difference might be, if you default .. By this, I mean - you borrow, say $30K, to finance a $40K machine .. meaning the most the bank could lose is perhaps the entire $30K (if you never made a payment, and wrecked the machine) .. but they DEMAND .. your house, additional property and assets, totalling $100K .. just to secure that $30K loan! Whenever they try to do this .. drop a hammer on their greedy fingers!! They don't NEED that $100K in security! .. they are only grabbing it, for two reasons .. 1. It adds to their so-called "asset base" .. meaning they can then lend out another $70K on unsecured credit cards .. using YOUR assets as collateral!! .. which they show on balance sheets as THEIR assets! .. 2. It prevents you from borrowing further against YOUR assets .. even though you may need more money urgently, in the future (i.e. unforeseen dramas such as a good customer filing Chapter X - serious accidents that weren't your fault, etc, etc) .. and this is playing into the hands of the lender who lent you the money in the 1st place . .and who NOW has you by the cojones .. and is in a very good position to start SQUEEZING!! .. :crying
Here's a chart that shouldn't surprise anyone that posted on this thread (except for the oil companies, everyone loves to beat on them)
Personally, I wouldn't exactly go so far as to say banks are anti business. Cautious, yes. I waited almost 8 years before asking my current bank for a loan. In my recent experience, what the banker wants to see are just a few key things. They want to see the numbers as to what your purchase can and will do for your business (business plan). My business plan was a one page letter that my banker said was "Way more than enough". They also want the last couple of tax returns. You need to show a profit on those tax returns. Otherwise, how will you be able to make your payments? The last thing is a sizable down payment to get the deal done. Put the cards on the table and ask your banker exactly how much they expect as a down payment to borrow money. Also, don't waste your time with the bean counter officers. They give some of these guys big titles to make you think you're talking to the owner of the bank. Meeting and dealing with a person that's truly up there in the ranks is a big plus and you can skip a lot of the BS. If your current banker (account officer) is not helping you move forward, plain and simple, just request another officer. Talk to seasoned business owners that deal with your bank and meet the people in higher places at your bank. It can save you a lot of time and misery. I'd be happy to share my simple business plan letter for my recent loan in case anyone wants to see it. Short, sweet and to the point. In my honest opinion, you need to sell "yourself" if you expect to get any money out of any bank.
could you share that letter with me?
A true story by a leasing executive who got a call from a banker. A true story by a leasing executive who got a call from a banker. A couple of years ago, I received an unsolicited call from a representative of one of the largest banks in the country. "I have been authorized to offer your company a preferred rate loan. The first year has a fixed seven and a half percent interest rate with no fees. Beginning the second year, the rate will be Prime plus one percent, and there will be a fee of just one percent of the entire line. What’s more, because of your fine credit rating and reputation, we will loan up to fifty thousand dollars without requiring financial statements. And that’s not all. [By now, I’m waiting for the six free steak knives]. We will provide a free business checking account. Just write out a check for your loan proceeds as you want them." "All we ask," he added, his enthusiasm changing to the rapid-fire drug interaction warning whispered at the end of a Viagra commercial, "is that you keep ten thousand dollars in that checking account." Heck, that ain’t hard, Mr. Viagra Banker. You just gave me fifty grand to play with. Now let’s take a closer look. If I need $40,000, I have to borrow $50,000. Forty for me; ten for the "free" checking account in which I must maintain ten thousand dollars. (What’s that you say? You usually keep ten thousand dollars in your checking account? Well, it’s a long way from usually - or average - to gotta.) So, I can use forty, but pay interest on fifty. At seven and one half percent per year, the payment on a three year, $50,000 loan is $1,555.31 per month. Now, $1,555.31 a month to pay off a three year FORTY THOUSAND dollar loan is, er, let’s see, 23.33 percent. And in a year number two it goes up to Prime plus one (plus a one percent fee). Even if there are no further increases in prime rate, payments will be $1,625.12 based on $50,000, and I can use only $39,500 ($50,000, less $10,000 in the non-interest bearing "free" checking account, less that pesky one percent fee). That works out to an effective interest rate of 27.59 percent.* Your lease of equipment worth $39,500, with first and last payment in advance and a small documentation fee, is going to be hundreds of dollars less each payment, with a one dollar purchase option. Payments are even lower than that with a Fair Market Value or ten percent purchase option, giving you possible significant tax benefits, and, and, and ... and we won’t insult you with lies about "seven and a half percent" or "prime plus one.". Please compare our quotes to any bank or leasing company. But compare dollars to dollars, and terms to terms. Will leases have the lowest real rate? Surprisingly often they will and never try to confuse you with misleading terms.
Is she cute...? Seriously though your not going to be using the hoe to move snow. Now you have the need for a 4x4 pushing machine with a cab. So here is what I would do. Find a used steiger 4x4 tractor w/ a blade. They are usually used for stockpiling silage and haylage. Or a 2wd. w/ loaded tires and chains. Use it for the season, and sell it, and get your backhoe. Ag tractors are a good bit cheaper than backhoes, you can also find really low hour older models. $15k should get you a decent older farm tractor that can push a pile. Like this tractor. http://www.tractorhouse.com/listings/detail.aspx?OHID=5432926&GUID=d214e776a2cb407097186de7538ec829
Uhh, stumpjumper, did you mean to post that in this thread? Tell us where it's supposed to be, and we can move it...
sure did
Bail out $700 billion to housing, finance and wall street and not one have put it back out for loans or mortages like they verbaly pledged to congress when they grabbed the money and run. Now the Big 3 want $50b to $150b so they won't go under. Point one: the reason the auto industry is in a bind is their sales have dropped 40% in 6 months??????? People are broke, scared out of work or expecting to be out of work in the near future so they're not going to buy their automobiles or anybody else's, why would they? even if they could the finance company's and banks won't loan unless you have a credit score of 750 or better and employed. I made a lot of money the first 6m. of 08 since then I haven't put a 100hrs on my dozer or backhoe combined. Went to talk to the bank and he didn't have a problem about extending my line of credit. (I'm in so deep he doesn't have much of a choice) the problem is I would't be in this shape if I had some work........Last 4 years it's all been in the oil industry and local farmers from time to time. Since Sept i've had 3 years worth of future contracts in oil and exloration jobs that the Oil company's have canceled. The farmers are hurting so bad they just planted around their ditches and washout's and if their ponds break they will sell the livestock. Give this country 6 more months like this or worse the small business owner (who employees 3 out of 4 jobs in usa) will be gone. They (gov) will not bail us out but the same Entity's and Company's that we gave $7 to $800 billion dollars of TAX PAYERS money to will forclose, bankrupt and/or liquidate all of us what it took all of us many years to get. Yes we have to bail out the automakers, (i dont think throwing money at it will work) it's vital for us as a country, but if there's no work who's going to pay the taxes that makes a bailout possible?? Banks are in the business of loaning money and the Fed Gov. needs to remind them of that, after all we as a Gov. loaned it to them. (I prefer gave to them, because you always hear about it going out but I can't ever recall reading in the news where industry has ever paid back loans from bailout money. Just my thought's on the whole sit. Sorry about the typos, misspelled words and the poor gramar I didn't get to finish college because I couldn't get a student loan. ointhead :Banghead :usa:usa:usa
I have run into this problem all the time. Banks want sure money, "we are risky business" not to mention we put up our houses, max out credit cards, personally garentee everything. Our whole life is invested to try to make something work. Then when we get established, start to make money, try to expand or get better rates the banks kick us to the curb. They say "too much unsecure debt" , "low credit score" Who mad the credit score game rules anyway? If you have money they will lend you more, If you need money the will turn you down. "The American Bank way" What a load of bunk! Im not bitter just bummed.
Revolt, revolt, revolt........ one day the peasants are going to say ENOUGH IS ENOUGH and take this country back. Makes me think the machine we built is turning on us.. HA HA
Fools rush in. In my third world country(Kenya), they sms, call, invite you for a cup of tea with the manager having aptly n conveniently forgotten what they previously put you through once your account looks healthy. Take heart my brother, it's universal
I would definatly write up a good business plan. Snow removale is not a use that would impress a lender. It's the same as overtime earnings they are not firm earning numbers. So I would like to see some real earnings for the backhoe, like digging and loading. also you should have in the plan what the profit per hour is for the machine,You may be getting 75 or 80 for the machine but the bottom line profit, may only be 20 or 25. so give the lender a good feeling as to how you can afford to ad this to your equipment list, also be able to explain what your other equipment bottom line profit is. the banks have taken a real beating on consruction equipment loans, so they are going to be tough to do business with. A way out might be to refinance some real estate, if you have any equty some where in your familly. A lot of the commertiol loan officers at banks today are pretty sharp, and have a lot of good questions to ask about the cost of running equipment, and also the values of used equipment. They just love to call construction equipment dealers and ask question about values of used equipment, and you know the values are going to be real low, especially if they are not selling it . But don't give up, they all have money to lend, you just have to show them that you know what you are doing.. Good luck, I was in your shoes 55 years ago, and just keot going from bank to bank until I found one that trusted me for my first equipment loan. Again do not give up .
As a former banker, I can tell you from experience that self-employed applicants are notoriously poor risks. Ask any banker.
Banks hate me. I have a operating loan available but keep my balance up enough that I never have to use it. Other then letters of credit they don't make much off me.
New on the forum guys, Realise that this is an old thread but just wanna get in my imput on this... When it comes to business and banks you might as well bend over the bankers desk drop'em and say please at least put some lipstick on before you take me for what i got, cause ive been turned over from banks even with an outstanding chunk of change in my accounts. Lets face it, banks are VERY low risk lenders.
Yeah, not a popular thread olezy. TD tried to put the squeeze on us about a month ago. Wanted to raise the rate on letters of credit. We told them we were just going to get bonded then and they called back a lowered the rate. My company has been dealing with them for over 30 years and haven't defaulted once. Makes you wonder when they say they HAVE to raise it then lower it within a hour.
just cause I was tired of looking at the phony casting thread
It is indeed better that we seek for more information that could guide us on how we are going to manage our financial accounts.
Banks are not ant business, you just need to understand how they work and what they want. First off a depositors money becomes a bankers liability, they need to loan it out to make money, they get profits between the loan interest and the interest paid to the depositor, its pretty simple, back in the 80's where depositors were paid at or over 15% and banks charged 15-18% they made about 3% profit and when the loans were defaulted on, banks didn't have the margins to stay in the profit end of the world and went under, today they loan out money for5-12% and pay depositors about 1% or less, not hard to do the math on that, but i'll help you out, thats more than 5-11 times the costs or I'll give you a dollar you give me 5-11 back, not bad huh? Now real-estate loans are less, the land or buildings go nowhere and don't get stolen, so the risk is less, thus lower interest costs on those loans verses iron or machines. They want collateral to cover the loan, or if you go broke they get paid in full and then some, no worries, like when you deposit 11 dollars and take one out and spend it, you've still got 10 left and don't worry, it didn't go anywhere and its safe, the higher the risk the higher the interest rate, or in your terms those that have the least and have no money and have the least ability to repay the loan pay the most, those that don't need the money and don't care to borrow it in the fist place and can repay it at any time get the best deals, great isn't it.................. now insert your name in the equation, hint its in the first part not the second part. Next they want a good plan, this and they've never actually run a business of their own so they need your intentions on paper so they don't get lost, and this part is a direct quote from a former bank director, they are not good at managing or running anything and never have and don't know how to turn a bucks profit if it involves physical work, that again is a direct quote I'll never forget, from the same director. Now the intentions need good plan, where theres guaranteed income coming in, like they get a monthly paycheck, anything else gets fuzzy for them because of lack of knowledge or experience in your world. Now your plan is hashed over by several bankers, cause one doesn't know anything about it so they run it by others that know less, again a quote from the director I knew. Next they look to see who else has applied for money to borrow and see whats available, then they draw from the crystal ball and toss up the coin and see if your qualified for the loan, more than one need to agree they don't know much about it and say either yes or no, at the same time they look at your assets, if you have something, they'll loan you more than you need, if not, your not going to get much if anything, next they look to see if an idiot has been willing to co sign the note for you, this gives a bonus for you since they now have another idiot to get repaid from when you go broke, provided he's an idiot with something not already spoken for by another bank and its of value, your wife's sister for a sex slave isn't a good asset, maybe a good piece of *ss but worthless for collateral, her car maybe provided its paid off and worth something. They then look at your intentions to repay the loan, here's not the time to state "someday" but rather monthly or yearly payments would be preferred, they then look at what you've got to do the repaying with, if anything, like income of any sort, here's where your financial statement comes in and your taxes, now they look at things like depreciation and how much you made in the past and calculate if you can survive and live on what you made last year or the last two years, here its usually law they have this, someone higher up realized they are not the sharpest knife in the drawer so they require them to have this on file in case someone wants to come from the government and check up on them to see their doing their job, in case you've been asleep the last few years with the liar loans and bogus house loans, apparently someone hasn't been doing that job, either at the banks or with the examiners who watch them, bear this in mind how smart they all are and money wise, you'll need it later in life. Next comes the loan or the refusal and either you've got it or not, if not, consider yourself lucky to dodge that bullet and walk away uninjured, if you get it, then you've got a partner in the form of a banker and he's the slowest thinking one in your business now, also something to remember for later reference. And you get to answer any questions they have, like what color machine did you buy, those type of things, but they will take pictures to help them remember these things to have on file and file a lean on your machine so you can't sell it without them finding out. Now for the repayments, you get to go make those payments and get to answer questions he may have for you at these times so be prepared. Now they can indeed call in your loan at any time if your not only behind on payments but if the bank examiners deem your a high risk loan, those guys that watched over the make sure bankers didn't break any laws and the loans they made were solid loans, yea those guys, so all in all your in good hands, being watched over by the smartest and brightest colleges have to offer being supervised by those that couldn't figure out how the liar loans worked in the fist place and above all the single most important part, when they get fired as a banker, the working sector wants nothing to do with them because they are not qualified to do anything worthwhile, another direct quote from that bank director friend of mine. So now that we went over banking 101 for dummies, aren't you glad you don't qualify most of the time. Sorry to offend bankers everywhere but any time i can poke some fun at them I can't resist. Now to be serious somewhat, always try to be upfront and honest with them, don't lie to them, and expect the same treatment in return from them. Know your business and how it works and its profit capability and keep an eye on costs, 90% of the loans made to the beginner are made on the person, not the business, they judge you as person and weight that into the equation, put on a suit and tie to deal with them, your not only representing yourself but your business, know what your talking about at all times and don't blow smoke up someone's *ss with hype you can't deliver. Shop around for a good deal and someone you want to deal with, they are in the market to loan money, they can negotiate about anything if they want to, use one verses another to compare rates and collateral needed by each, there is a considerable difference between banks and their policies for collateral. Look for one that somewhat understands your business, not many do, I try to deal with more than one at any given time and ask about deals they are willing to give and I'll pay off a loan and go to another bank at any time if they are a better deal and place to do business with. They are then a partner in your business and use them as such, if you have a customer who your not sure your going to get paid from, ask the banker to do the behind the scenes work to find out for you, they can do anything they want, its after all their money you might get scammed out of and should be willing to help you out with advice, if not hunt elsewhere for one that does. Learn how money works in business and things like return on investment and profitability and also debt to asset ratios, things like that, you don't need to be a rocket scientist to do a good job of understanding how banking works, if your to survive in any business you need to know at least the basics, bankers are not to be feared or a overlord over you, if they are look for the next one, bank policies change all the time so one minute they might be a good partner the next time not so good, its just life. Keep them informed as to whats going on with your business, don't be a stranger in the bank you borrowed money from, let them know about your intentions and what your thinking to do in the future, make them a part of it, keep it business related at all times, and never do business with relatives or family if they are in the banking industry and gleam as much information from them you can, ask questions if you don't know or understand and never sign anything unless you read every word, ask for explanations if needed what things mean, there is no disgrace in this on your part, also don't be overdrawn a lot on your accounts, it makes you look bad and like an idiot who knows nothing. Ask your credit score every year and know what it means, have the bank check for you and find out why it went down and how to prevent it again, see what you can do to get it up higher than it is now. Eliminate credit cards and credit card debt. The wealthiest people in the world have come from modest means and have the most at the end, not the ones with riches and wealth at the start, because they know what it takes to make a dollar and hang onto it longer, another quote from my bank director friend.
Randy, Very well spoken in regards to the banking issues & obtaining credit. I think of them & capital as a tool; it will only perform and be available to you when needed with a direct correlation of how well you manage it.
Try a smaller bank... I too am 21 years old and just borrowed 20k. I personally know everyone in the bank, they know me well as well so that may help. But if I were to have tried at a bigger bank I doubt i would have had success.. I did not have to give any sort of business plan or anything. Simply told them what I wanted to buy and got told "I obviously have no problem with that". Try to develop a relationship with a small town bank!
I just wanna say I check this forum out sometimes cuz I do a little excavating on the side, gotta trackloader and a hoe and a truck. My main bizis farming. But anyway. I agree. Banks are and * *** scam. I have been in biz for 12 years. Built a huge amount of equity. Not gonna get into numbers but I will tell you the ratios. Wanted to buy a farm, anod I did buy it but getting the dollars was hard. I offered to collerteralize the loan 4 to 1, with 1/4 of the colleterall being real estate. So the mortgage would be more then covered just by the land alone. But I had to beat the street every day for 4 weeks to get the money for this deal. I went to every bank I could find that would talk to me. I mean these people are terriable. Will not call back, want all kinds of stupid documentation. It was crazy. They treated me like a criminal. You say go to smal banks. Well my small bank was the worst. I hate those people. I hope they go under, which it sounds like they might because they loan money to people who can't back it up. But they won't loan to me, who can back it up 4 times. Well anyway guys. Don't give up. I wanted the farm and I got it. Just gotta work them banks like there is no tommrow.
Parker22 there just hit it right smack on the head. Develop a good working realtionship with a small community bank. Once they get to know you and have some experience with you things will become much easier. The big banks have no authority to do anything at the local branch level. About all they can do at the branch is open an account for you and then hassle you if you want to get your money out. Everything else has to go up the ladder to "underwritting" as they call it. I dealt with a small community bank for years. They were sold. The new owner left it alone for a year then everything went to hell. The fellow I dealt with there quit and went to a small community bank. I did too after using the same bank for better then 40 years. If I need money short term on a job I have it in a single phone call. If I want a piece of equipment or vehicle they are right there to help. The other thing about a bank like this is if you should run into problems they will work with you. Big bank, screw you, they will sell you out in a heart beat. I do international work also and in those cases get paid by a letter of credit. This is always organized and arranged through the big off shore and domestic banks. I always have a hassle with them holding my money for up to ten days from the time the originating bank releases it. Every time I get the same story. "This would work better if you had an account with us." I don't want it and don't need it. There is no reason why they can't release my money the same day it comes in other then they want to loan it out overnight as they all do and make money off of me in the process in addition to their transaction fees. Once again you are right Parker 22. Use a small community bank and you will be far ahead.
try local credit unions
I agree a credit union might be a better place to start. If you try to post used equip as equity it is going to be tough. The bank managers have not much to work with as far as true loan value, so you should get al your value facts together 1st. the internet sales records available from auctions are a good place to start, also a good used equip dealer have some loan value books that may help you or give you a good idea of trade in values. also be ready to talk about maint upkeep and run costs/per/hour, insurances\ce ECT. IF YOU LOOK AND SOUND IMPRESSIVE YOU WILL GET YOUR LOAN. Refinancing or posting real estate is also a good way if they turn you down... Woops i just read back a bit on this post and I got lost. I can,t find the individual that needs to get a loan for what??? sorry
Banks change all the time, as new managers come along, comes different ideas on loans they want to work with, so a bank that was good to deal with a few years back are really bad today, you just need to remember anytime theres a change in personnel there's a potential problem with what type of business your in, not you per say personally. I've left several banks over the years because of this, new management came in set up the policy that excavation was high risk and when new loans are to made out, jack the interest rates and collateral requirements needed, it had nothing to do with my prior performance on loans or how sound my business was, it was strictly bank policy set up by new management, so I shopped elsewhere for someone wanting my loans or business. I always keep an eye out and try to do business with more than one bank at a time, that way when policy in one changes, I'm not completely out of options and have time to find the next replacement lender as I get rid of the one with new policy changes. Also once you somewhat understand how banks operate, use one against the other, I've applied many times for loans at up to a half dozen banks at the same time, all were approved and I chose the one with the best terms for me, and told the others sorry maybe next time they'll do a better job of competing. A bank board dirctor friend of mine told me once to do this and I found out fast that there is a big difference in banks policiies and loan requirements, what one bank considers a good risk another considers a bad risk, you just need to shop around to find out who's willing to deal with you and how bad they want you. The terms and interst rates tell you more about a banks inner policy than anything the loan officer says. When one bank comes back 4% higher interst rate than another bank, they might want your loan but you know right away they are labeling you a higher risk than another bank is. Same goes for collateral terms, if one bank wants everything you own tied up for a simple laon verses the next bank that only wants say 10% more than what they are loaning you for collateral, you know immediately who has you lableled high risk and who doesn't. So if one bank turns you down, just shop around, and even if one accepts you, shop around anyhow, somoene might do better for you than the first to approve your loan. Your in business to make money, plain and simple, unless you do charity work and are rich enough to do work for no pay, you are in essence in business. You have to compete against others out there to get business, or bid work, or however you get the work, your competing for that market share, make banks do the same for you, don't just hand them your business and take what they offer you, make them work for it and compete with other banks to offer you the best deal they can and take the best deal offered to you by the one willing to do the most on your behalf. Most shop around for the best deal on a machine, the lowest price, best service, best interst rate on the financing, whatever, just do the same for banks, they are not some god to be feared or hated, they just handle money, nothing else, some don't understand this are afraid of them, some hate them, others still avoid them, however or whatever catagory your in, just remember they are in business, same as you, they just offer a different service than you do is all, once you understand how they work, get the best deal and terms you can from them, if or when bank policy changes, move on and go somewhere else to do business with the next one.
Randy 88 has it right, But in most cases the Banker talking to a Business man makes less than the Business man & is jealous....Jealousy breeds contempt....Bankers have no common sense, their lazy & all their decisions are made by guide books, computers & group therapy know as the committee meets on Thursday....Don't ever be afraid to sue a bank if your right....There is a statute called lender liability....I was in business for 50 years & have borrowed untold millions....Back in 1985 I was Banking with the biggest there was, Well they got a new branch manager & he didn't like me, Hard to believe I know....Well he called in my loan for no reason, Off to the legal eagle I go, send them nasty letter, see you in court, now understand they have a mortgage on my commercial property which is a cash cow....I'll make this short after 12 years in court I won, The judge fined the bank $ 25,000 which was awarded to me, they had to pay my lawyers fees which were $ 66,000, The mortgage was vacated which was $ 187,000 & I was awarded $ 125,000 in damages....Then in 1997 the same thing happened with another biggee, but they were all demand notes, about $ 200,000.... lawyer sent them letter we would sue & cited my case law, to this day we haven't heard a word, they just wrote it off....So if your right fight them but get a good lawyer who's not afraid of a fight & doesn't live in the same town.............P.S In the case of the first bank they had a stand alone building in a shopping mall....Guess who owned the land & building....You got it....:bash:bash:bash
Unfortunately banks initially look at only a few things before looking deeper into the deal: credit score, equipment cost, and time in business. A minimum of 2 years is typical for any lending institution. When these criteria aren't up to par they usually just scratch the deal no matter what your revenue plans are. Your best bet is to go through an equipment leasing company and see what they can do for you. Banks are more likely to approve deals when a financial professional already has the research and information ready for them to review. Banks don't want like dealing with individual people and unfortunately, the younger and less experienced you are, the more banks find you risky.