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Dam Banks!!

Discussion in 'Business Fundamentals' started by cold_and_tired, Dec 15, 2010.

  1. cold_and_tired

    cold_and_tired PlowSite.com Addict
    Messages: 1,247

    Walked into my local branch of a bank that I have been with for YEARS. I told them that I need a loan to purchase a machine (skid steer) and they told me that my business has no credit and they could not give me a loan.

    Duh. I started this business four years ago with my own money. I have ZERO business debt right now.

    I asked them what was the best way to build business credit. They told me to get a credit card in the company name. Ok, I can handle that. I fill out the application and received a call back a few days later saying that I had been declined because my business had no credit.

    Are you freaking kidding me?

    What is the next best way to go about getting the money for a machine? I would really rather not use my personal credit for a purchase.
  2. newhere

    newhere PlowSite.com Addict
    from Fenton
    Messages: 1,288

    your going to have to, get use to it.

    even if they did give your biz a loan i bet will make you co-sign it holding you just as responsible.
  3. rofoth6

    rofoth6 Member
    from iowa
    Messages: 67

    It's a catch 22. Got to have credit to get credit.But nobody will give you credit to get credit.:realmad:
  4. LoneCowboy

    LoneCowboy PlowSite.com Addict
    Messages: 1,760

    banks are no good
    I went in two years ago to get a loan for my dump truck (just to save the capital)
    they said "no can do"
    I said, I'm going to write a check for it then, off the money that's sitting in my business account in your bank.
    Nooo, too great of a risk.

    anyway, I've found tractor/equipment dealers have great financing rates and easy to finance. As long as you put down 20% or so, not a big deal, rates in the 5 to 7% range.
    work with the dealer.
    I've got a new 15' batwing coming in the spring, took like 30 seconds to do the financing.

    Forget the banks, they don't want my money, they don't get it then.

    and yeah, every time I get a job from a bank (mostly foreclosures), they pay a good 20% more than regular people.
    Last edited by a moderator: Dec 16, 2010
  5. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,275

    In todays business environment, you as the owner will almost always be providing the guarantee for the loan. I guess I'll bet also.

    Try working with a dealer on purchasing a machine. They can help you get financing on used machines as well.
    If you are struggling to get credit, they (you) could rent a machine for a period of 3-6 months, as you build up equity it's easier and the finance companies are more willing to convert the machine to a purchase.
  6. EGLC

    EGLC PlowSite.com Addict
    Messages: 1,733

    had the same issue when I was 19 buying a 11k truck putting down 50% and banks told me to eff off. So I bought it cash, went down to my John Deere dealer in spring and bought a 13k mower with ZERO down and I took delivery 2 days later!

    ** btw I ALSO offered the bank 50% down PLUS the remaining 50% in a CD that I could NOT touch until loan was paid off and they STILL DENIED ME!! Like are you fuggin kidding me?!

    like rofoth6 said you need credit to get credit.But nobody will give you credit to get credit....so for now I'm stuck paying cash.

    I also just found out the John Deere credit does NOT report to the credit unions so my $395 monthly payment that i've been sending in $495 on to pay off quicker has no been helping my credit score at ALL :realmad: :gunsfiring:
    Last edited: Dec 16, 2010
  7. WilliamOak

    WilliamOak PlowSite.com Addict
    Messages: 1,988

    Before I got my dmax I paid off the remaining balance of my old truck a year early, then went to them for a loan on a 13k truck and got DENIED w/ 50% down.. The fact that I made every payment on time and paid it off early held no weight...
  8. show-n-go

    show-n-go Senior Member
    Messages: 776

    The reason the bank didn't care was they want to see how you pay over a long length of time, not how fast you can pay off your loan. The earlier you pay it off the less they make. Good for you=bad for them.

    Once you have 36-48 payments made thats when you have some depth to your credit, and thats what they are looking for.

    For the business loans they almost always require a cosigner just because they have been burned to many times doing them without, unless your company has credit on the dun and bradstreet report your going to need to cosign the loan. By cosigning you will help your business build credit so that one day you wont need to sign.
    I agree banks are picky with limited credit but they are lending today based on history of there books.
  9. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    Dealers will find you financing, just don't let them rape you on the rate. Any dealer, equipment/car or anything else, makes money on financing. There's most often a buy rate, the rate the financial institution actually approved you for and the sell rate, which is what(the rate) the dealer trys to get you to sign.

    Thats if there's no advertised "program" going on. I know New Holland has been running a winter thing for the last few years, where you only pay during winter months, not sure if this is a lease or a finance plan.

    If you can't secure the credit is leasing an option? Or possibly purchasing used without a note?
  10. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    We did a lease to own deal. The rates were better than a bank or just as low, the payments are reasonable and its only a 36 month lease with a dollar bye out the last month. I can PM you the guys number, they are out of Pittsburgh. I ran into kind of the same thing. We needed a wheel loader and we had signed contracts with guaranteed income and they still said no even with us having great credit scores. It was a simple and fast process, we heard back in 2 days and that was only because the guy was out of his office for a day.
  11. JCByrd24

    JCByrd24 Senior Member
    from Maine
    Messages: 232

    I don't think paying extra on a loan will help your credit score, but making your regular loan payments should as long as you don't have too many loans or whatever. Are you saying your Deer account doesn't show up at all?
  12. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    Its more than a good credit score. It's also debt to income ratio, revolving money, a consistent healthy balance in the account and it seems if your missing just one of these your S.O.L.
  13. T.French

    T.French Member
    Messages: 45

    I wanted a line of credit from our bank,They wanted to put a lein on all my equipment I own free and clear.Said no way.Wanted a truck loan they told me go pick it out.Wanted 150k for real estate purchase no problem.But the bottom line is whether business or personal your name is still an the line.
  14. magnum1

    magnum1 Senior Member
    from ID & ND
    Messages: 249

    Have you tried a credit union, I also requested a credit line from my bank they declined my request for a buis. loan ( been in buis since 1989 with a high credit rating ) but informed me I could open a pesonnal line of credit.
    I spoke with one of the credit union reps I deal with she recommended a credit card
    through them with a low single didget fixed rate and a high credit allowance. Maybe that could be a solution.
  15. norrod

    norrod Senior Member
    Messages: 113

    Start up credit is one step at a time.
    On my startup, I purchased a skid steer from BobCat, and they were more then happy to finance. I then purchased a used Dump druck from a truck dealer. I had a sizable down, so they were happy to finance. I had a local mechanic that did all my inspections, and some of my repairs. He was happy to let me use him as a business credit reference when I applied for a biz account with United Rentals. This lead to a credit card for the Company, and other lines of credit.

    Keep in mind I was not really interested in revolving accounts, but it's nice to know I could call United Rental for an excavator or dozer drop, and not worry about paying the bill till next mont. while establishing credit.
  16. cold_and_tired

    cold_and_tired PlowSite.com Addict
    Messages: 1,247

    I am just the opposite. I have multiple rental accounts and got those quite easily but cant seem to find the financing to purchase a machine.
  17. magnum1

    magnum1 Senior Member
    from ID & ND
    Messages: 249

    Try Agricredit Acceptance LLC
    Email me for the #
    Last edited: Dec 18, 2010
  18. EGLC

    EGLC PlowSite.com Addict
    Messages: 1,733

    YES! And JD reps told me that it will ONLY show if I default!! That's such a load of shyt! If they don't report when I do make payments, then I feel they should NOT be allowed to report if I was to not make payments!!! :mad::realmad::gunsfiring:
  19. coldcoffee

    coldcoffee Senior Member
    Messages: 776

    Any loan I've ever had was personal. I grew tired of the games and hidden fees that banks and finance companies like to play, including sometimes the add on of life insurance, points, etc. I have my own private investors now, which makes for fast cut-n-dry deals. Smaller deals they might just do cash out of pocket, larger ones they use their secured credit lines. It works for them because they get a better return than cd's and the like. It works for me because I know clearly what my deal is w/ no surprises, and I can focus on what I do best. I can also pay off early w/ no prepayment penalties. Their are plenty of people out there w/ money, that want to put it to work. Otherwise, the dealer or someone who specializes in small loans is probably your best option.
    Last edited: Dec 18, 2010
  20. 01lariat

    01lariat Member
    Messages: 96

    You need to have a great credit score for them to even look at you. The bank won't float me a gum ball. Student aid however, I got no problem. So I guess that is my ticket back to having credit.