Equipment financing options and terms

[rdelight]

Hi there,

I'm running a small wrap shop and I'm trying to upgrade some of my equipment, laminator, and cutter and I found 5.5% financing for 5 years term on $23000 worth of equipment through MMP Capital, but the guy who does the financing doesn't act professionally and I would like to work with somebody else.

Where should I look for a legit financial institution, did you guys work with somebody recently? What was your financed amount, terms, and APR?

 

[soggywinter]

Try a local business bank or CIT bank - CIT.com

 

[Jeremiah]

Personally, I dont want any debt on my shop ! If we cant afford if we dont buy it. A Tiny loan is ok to keep our credit rating active. Years ago I made a deal with the Distributor, I made 2 payments on an item.

 

[binki]

US Bank is pretty good. We have done several equipment loans with them over the last 20 years.

 

[FireSprint.com]

We do most of our financing through our own bank. If not our own bank we generally use Geneva Capital >> troy [insert_at_symbol_here] gogc.com

We have found that our own bank will generally give us the best rates, but will want 10-20% down. Geneva is a specialized equipment financer, so they will often do 0% down.

TIP: Make sure there is no early repayment penalty. Just ask them to drop it off their contract if there is one.

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Something else to keep in mind. If you purchase it with a loan, you will be responsible for the property tax. If you lease it, the financial institution will most likely bill you for the property tax, then pay it. The only significant difference between a lease and a loan is the buyout at the end. On the last payment, a loan will end and you will own your equipment. On a lease, after your last payment you might still owe $1, Fair Market Value (FMV), 10%, 20% or something different. This will be specified in your lease terms and should be very clear in the beginning. In other words, don't let the term "Lease" or "Loan" sway your opinion too much. In most cases they are about the same.

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There are a lot of companies that handle equipment financing + just about every Bank on the planet. Even though it may seem like you are at their mercy, you are not. You are the customer. You can negotiate for better terms. They only get paid if you take a loan/lease from them.

 

[White Haus]

Good points Gene, I completely agree.

We usually do 48-60 month leases with $1 buyout at the end. It has worked well for us over the years and we have kept the equipment still running well beyond when it's paid off.

Also did a $40k equipment loan from a Canadian business development bank and that was pretty smooth. Interest rate was a bit higher but money came fast and we can repay any time w/o penalties.

To the OP - definitely shop around. As long as your books/credit is clean, you are in the driver's seat and shouldn't have to deal with a sketchy broker. Get a formal quote from the supplier for all the equipment and go shopping, chances are you'll find someone who is going to give you better service and/or a better rate. Credit is cheap right now.

 

[rdelight]

I went to my bank and another local bank and I left a voicemail at a banker to CIT, I'll see who will get back to me.

 

[TSC1985]

If you can cash flow it over 1-2 years have you looked in the into APR's for business credit cards? We get lots of ads for 0% interest for 15-18 months these days on lots of credit cards. If you need more time, can open another card on the remaining balance with the balance transfer fee, usually in the 4-5% range one time fee. We did this on our lam table, 36 months interest free APR over 2 cards and the fee charged for the 2nd card was only on half of the total.

 

[Geneva Olson]

I went through GSG to buy my equipment and they used Geneva capital. It's great for me.

 

[Baz]

I use a leasing company that specializes in farm equipment (National Leasing). I don't have the exact details in front of me but if i remember it's pretty much 0% during the terms but buyout is 10% of the amount financed.
So my strategy was to put down as much as i could to make the final buyout as low as possible. Works great for me.

Also, there is nothing wrong with going into debt on equipment that makes you money. The friggin machine is supposed to pay for itself.

 

[White Haus]

I use a leasing company that specializes in farm equipment (National Leasing). I don't have the exact details in front of me but if i remember it's pretty much 0% during the terms but buyout is 10% of the amount financed.
So my strategy was to put down as much as i could to make the final buyout as low as possible. Works great for me.

Also, there is nothing wrong with going into debt on equipment that makes you money. The friggin machine is supposed to pay for itself.

Yes National Leasing/CWB has always been good to us. They don't even ask for financials anymore lol.

 

[AntCarter]

Just formed my LLC, and I have great personal credit.. but I would like to start building business credit to keep the business separate from the personal side.
Out of curiosity how many of you guys started your business with personal (Fico) Vs Business credit (Paydex)

 

[Geneva Olson]

Just formed my LLC, and I have great personal credit.. but I would like to start building business credit to keep the business separate from the personal side.
Out of curiosity how many of you guys started your business with personal (Fico) Vs Business credit (Paydex)

Am I missing something here? If a person has never been in business before, how would they have business credit?

 

[johnnysigns]

They'll fall back to your personal credit and likely want you to sign personally to cover the loan amount if your business defaults.

 

[johnnysigns]

Vehicle financing doesn't actually help your business credit score as well. It's kind of an easy one that I'd initially thought would work in my favor, but I found out later it didn't have any impact.

 

[johnnysigns]

TIP: Make sure there is no early repayment penalty. Just ask them to drop it off their contract if there is one.

I'd also pay keen attention to this as well.

 

[AntCarter]

Am I missing something here? If a person has never been in business before, how would they have business credit?

You can build business credit by getting small net 30 accounts from places like Uline, Quill, Grainger ect. Such stores report back to business Credit Bureaus Dun & Bradstreet, Experian, and Equifax

Net 30 accounts are a form of business credit that lets you pay off your invoices 30 days after your initial purchase. A net 30 vendor may report your account usage to the major commercial credit bureaus, helping you build business credit.

 

[Geneva Olson]

You can build business credit by getting small net 30 accounts from places like Uline, Quill, Grainger ect. Such stores report back to business Credit Bureaus Dun & Bradstreet, Experian, and Equifax

Net 30 accounts are a form of business credit that lets you pay off your invoices 30 days after your initial purchase. A net 30 vendor may report your account usage to the major commercial credit bureaus, helping you build business credit.

DId you misunderstand my question?
The question is: How does one obtain business credit PRIOR TO OWNING A BUSINESS?

 

[jochwat]

Giggity-giggity-Google.

https://www.wolterskluwer.com/en/expert-insights/how-to-build-business-credit-for-a-small-business

 

[Stacey K]

I have my printer through CIT and the interest rate is crazy low...like 1% (that was last year)