Wednesday, October 17, 2007

Finance or Pay Cash for Equipment

Cash or finance large equipment? This debate comes up often in the lawn service business. If you can pay cash I say great. If you can manage your money and get a good rate (sometimes even zero % financing) financing is great as well. It just depends on your personal preference and situation. Lots of people take out loans even if they have plenty of cash on hand. Using the bank's money to make more for yourself is fine, just make sure you do not get too far into debt. A friend of mine who is as good with money as anyone I know still buys things when they do the zero % financing for 1 years even though he could just as easily pay cash. He just prefers to do it that way.
If you do get a loan for a mower or other equipment try to pay it off faster than the loan is scheduled for to save some interest $$$ and you will feel good about doing so. Shop around for the best rate also. My first mower was financed through a local bank & I got a bad rate even though I have good credit. I just did not shop around. Sheffield Financial
is a great place and they specialize in mower financing as well as 4 wheelers and other equipment.
If you pay cash for your toys (i mean equipment :) ) everything is simpler. No payments to worry about or keep up with , etc. Either way you need to plan for your next purchase whether the plan is to add another mower or to replace the mower you are using. If you do not like to work on your stuff I suggest buying new every 2 to 3 years.


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