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thegroundscrew
02-13-2012, 02:27 PM
We just got approved by the bank and we are now offering, up to two year financing for all of our customers. We are offering financing for only those with good credit at only 3% interest rate. We are really moving towards helping out our customers as much as possible and making their ease of pay much more manageable. Anyways...

Do any of you guys offer financing?
If yes...
Up to how many years?
What percent interest rate?
Is it available to anyone even with poor history?

Just general talk about financing!

dpld
02-13-2012, 02:49 PM
We just got approved by the bank and we are now offering, up to two year financing for all of our customers. We are offering financing for only those with good credit at only 3% interest rate. We are really moving towards helping out our customers as much as possible and making their ease of pay much more manageable. Anyways...

Do any of you guys offer financing?
If yes...
Up to how many years?
What percent interest rate?
Is it available to anyone even with poor history?

Just general talk about financing!

is this financing for lawn services or landscape construction jobs?

thegroundscrew
02-13-2012, 03:00 PM
Mostly landsape construction jobs but if it is a large one time lawn service that is say over $1,000 then financing will be available. The financing has a minimum of $1,000 so any project exceeding that can be financed.

dpld
02-13-2012, 04:25 PM
Mostly landsape construction jobs but if it is a large one time lawn service that is say over $1,000 then financing will be available. The financing has a minimum of $1,000 so any project exceeding that can be financed.

thats very intresting, makes sense.

good luck with that.

SECTLANDSCAPING
02-13-2012, 04:33 PM
I was contacted by a company that does this with a $500 minimum. At the time I wasnt interested but could see how it would be worth having.

picframer
02-13-2012, 05:16 PM
As a banker of 16 years give this new venture some really had thought, IMHO it's a head ache you do not want, you can make arrangements, at least here, where I can have a client fill out a credit application however the financing is between the lender and the customer, if the bank is lending you the money and you are lending it to clients...gosh buddy this could be a nightmare.

Steve
02-13-2012, 05:39 PM
Can you explain a little more on how this works? Are you handling the financing? Or does the customer fill out a form you provide and then it is between the bank and the customer?

What got you to think about offering this?

thegroundscrew
02-13-2012, 11:53 PM
Well I actually have the connections. My dad owns a large consumer finance company and we worked out a deal between my dad and I and the bank to get money and I only have to pay 1% on it. My goal isn't even trying to make money (even though I still will be making 2%) but work with my clients especially during these hard times. My dad has one of the best relationships with Bank of America, WAMU, and Chase that they just want to help me out because they know that in the future I will be working with them when I start getting into realestate. So basically it's about building a foundation based on relationships of integrity and trust. My dad knows everything about finance and as a strong business sense and said that this was the best option for my company. But what headaches were you thinking could come up from this?

picframer
02-14-2012, 06:24 AM
The spread of 2% is taxable income

Your balance sheet will require an accountant

Depends on the laws where you live on charging interest, a finance agreement will need to be prepared and I suggest a lawyer prepare the template for you, you will need a system to provide the customer with an annual statement, payments received, amount applied to principal and the amount of interest

Collections, as you can see on the forum many if now most have issues collecting for lawn care, the economy IMHO isn't going to turn around anytime soon so collections will factor in as stuff happens to good people with a good credit rating

You will need to be set up and pay for credit checks, you will also need to provide a privacy statement and ensure all confidential data is under lock and key, this will include a good firewall on your computer, even the big guys get hacked.

That is just off the top of my head, you are basically setting yourself up as a Merchant Bank as we call them, yes many make money, many fail

dpld
02-14-2012, 08:35 AM
let me get this straight, you will be doing the financing yourself with the help of other banks and the terms are for two years.

what happens when the customer can not pay?

the way i see it is this, if you are a homeowner and you have excellent credit in this day and age you probably are doing pretty well for yourself and don't need to borrow a couple thousand dollars over two years to do a job that will and should increase the value of your property.
and if you have excellent credit and you don't have the money, chances are your lifestyle is going to catch up to you and you won't have good credit for long.

at the same time if you are a homeowner and you can not afford to do the job that is let's say 3,000.00 you propbably got no business borrowing the money to begin with for a luxury item like a patio or a decorative wall or sidewalk.
if that person is in a position where they can not afford the 3,000.00 dollar example this year, chances are high that they will not be able to afford it next year either so a two year plan will not help them as much and is only buying them a little time.

6 or 10 years ago this probably might be a little better idea then it is now when banks were throwing money at people but today with record numbers of unemployment and foreclosures as well as defaults on credit cards i would be hard pressed that a bank would even lend money like that.

also, unless the bank is going to get some form of collateral i doubt they will be lending the money anyway because they can not repo a patio.

the thing that stands out to me is you said customers with excellent credit can apply and that brings me back to my original point, if someone has excellent credit they will not need to borrow money for a few thousand dollar job and if so they might allready have a line of credit with their home.
if it is a large job, let's say 10,000 dollars, two year financing is going to be pointless.

i don't know exactly how things are going in your region with the economy but banks are just not lending money right now. they are not lending money in my state and i live in one of the top four richest states as far as household income goes and our real estate values are very high compared to the national average. so if it is like that in my area it is safe to say it is happening everywhere.

i understand where you are coming from and what you are trying to do as far as getting more business and on paper it seems like a good plan but the times we live in tells me that it is not going to get much work for you and if you are gonna be on the hook in any way shape or form, it sounds like a recipe for disaster.

i had a successful old customer tell me a long time ago that built multi million dollar homes for a living say that if you got to ask how much something cost then you probably can not afford it.
it basicly means that sure you will need to know the final cost but being you are in the market for a particular item you should allready have a idea as to what it will cost and if you don't have the resources on hand to make the deal then you really should not be buying it.

years ago people saved their money and lived without until they could afford it and starting like 20 years ago banks helped fuel the fire of buy now pay later and that is what got this country in the mess it is in today.

in my area, when you drive down the a street with multi million dollar homes you can easily spot the people who can afford to live in a home that exspensive and the ones who can not.
i been in many exspensive homes where the people could not even furnish the house because they are so strung out paying for the house they can not afford and should have not bought.

the bottom line is you are a landscaper, not a bank and you really don't want to do business with people who can not afford your services and even if they have great credit and are good for the money i don't think they will need to have the landscaper pull some strings for them to get it done.
as a landscaper you are building their dream and in no way shape or form should you get involved in financing their dream as well as even be involved in knowing anything about their finances.

SECTLANDSCAPING
02-14-2012, 11:58 AM
I agree with DPLD,

The company that contacted me handled the credit part. If the customer was approved, you would get a check for the full amount and the customer would pay the 3rd party with installments.

I told the agent the same thing that DPLD just said. If they cant afford a deck that wraps around the pool they have no business calling me. If they can then whats the point of financing?

Credit scores are a funny thing. I have no debt, never borrowed a dollar in my life, make good money and my fiance has a higher credit score. The bank would give money to her first and she has a 1/4 of my income. Go figure!

The one person this would work for is the guy/company that wants to raise the value of the home to get a higher return on the sale. The whole reason to defer payment would be to not invest to much money till the sale comes through. The house could be on the market a few years so the payments work. Of course this type of loan could have liens or collateral.

thegroundscrew
02-14-2012, 01:01 PM
THANKS for the input and I understand where you guys are all coming from but my financial advisor and father brought this to the table thinking it will be an excellent idea. My dad used to own a succesful commercial landscape company and he offered financing and he said that it was one of the best things he has done. Also i trust what my dad says and he said that this will be the best right now for my business. He owns a succesful finance company with 63 employees so I am going to go with what he says. He knows what he is talking about. And on a personal side I'm not going to be dealing with the customer's financial status because quite frankly i could care less. We have someone in the office that will be doing all that so I dont even need to worry about it. It has worked for him in the past and will hopefuly work with me.

dpld
02-14-2012, 01:20 PM
THANKS for the input and I understand where you guys are all coming from but my financial advisor and father brought this to the table thinking it will be an excellent idea. My dad used to own a succesful commercial landscape company and he offered financing and he said that it was one of the best things he has done. Also i trust what my dad says and he said that this will be the best right now for my business. He owns a succesful finance company with 63 employees so I am going to go with what he says. He knows what he is talking about. And on a personal side I'm not going to be dealing with the customer's financial status because quite frankly i could care less. We have someone in the office that will be doing all that so I dont even need to worry about it. It has worked for him in the past and will hopefuly work with me.




i am sure your dad knows what he is doing and i myself was just chimeing my two cents in from my 23 years of experience.
i don't have 63 employees but my small business grosses close to half a million a year so i would like to believe i have seen my share as well.

the only cautionary note i will add is that the times are very different from the way they were just 5 years ago and they sure have changed quite a bit since i started my business back in 1990.
my point is even though it could still be a big boost for your business like it was your dads i just can not see it being as effective in 2012.

either way it looks like you have a great supporting cast in your dad and family and i hope it works out better for you then you plan.

good luck and keep us posted.:)

thegroundscrew
02-14-2012, 01:29 PM
Thanks dpld. You definitly have a lot of experience under your belt and I will actually bring what you said to my father and advisor to see what they have to say about it. It was of great help to see another view point. I will keep you updated as Spring season picks up to see how it works out. Thank you.

Steve
02-15-2012, 12:18 AM
It is a very creative idea. Let us know how it works out for you.