Early Lease Pay off?

[steve g]

what do you expect from a broke dick carpet cleaner like Ken

some of the stuff ken throws out there I scratch my head on, like its a good idea to own a vortex or owing money on your equipment is better than paying cash. one can never predict whats going to happen, what if you get hurt and can't work, what if the auto makers in detroit totally shut down. what if obama tries to make being a dictator official, its better to flat out own your equipment either way, its a sign of stability.

 

[Brian R]

Stability has no place in business. lol

Risks are what separate the big dogs from the little pups.

what if you get hurt and can't work

Then you can't work the truck anyway....this is a good reason to have a back up plan in place....Like having more than one resource.

what if the auto makers in detroit totally shut down

You'll still have your truck...and it will probably last longer if it's new enough to still be financed.

 

[floorguy]

My Back up plan.....

Get a CDL and drive big rigs...

Read a story the other day that says we are going to be hurting for drivers, with all the oldies retiring etc....not much new blood coming in..

 

[Jim Martin]

[quote="Greg Crowley":2pi6wvow]what do you expect from a broke dick carpet cleaner like Ken

some of the stuff ken throws out there I scratch my head on, like its a good idea to own a vortex or owing money on your equipment is better than paying cash. one can never predict whats going to happen, what if you get hurt and can't work, what if the auto makers in detroit totally shut down. what if obama tries to make being a dictator official, its better to flat out own your equipment either way, its a sign of stability.[/quote:2pi6wvow]

what if.......you pull up to a job and for some strange reason you get side tracked while listening to Obama give a speech about making dictator official and closing of the detroit auto makers...all the sudden you get run over by your own damn truck..and as it is rolling it hits a hydrant totals the van/trailer and equipment..and water shoots up in the air and hits a airplane ( really strong hydrant ) and it crashes into the bank that all your money is at..... and all the records of every penny your ran over broken ass ever made is totally wiped out.....M.F.G......you sound like your afraid to get out of bed in the mornings.......

probably send out a dude in a vortex to clean up the mess...

 

[steve frasier]

why not ask your tax guy instead of listening to a bunch of BDCC

Ken has different things to look at and has advantages, like creating his own leasing company, that most of us don't but he is right whne he says you won't find money any cheaper then it is right now

 

[Ken Snow]

[quote="Greg Crowley":11qnz2ma]what do you expect from a broke dick carpet cleaner like Ken

some of the stuff ken throws out there I scratch my head on, like its a good idea to own a vortex or owing money on your equipment is better than paying cash. one can never predict whats going to happen, what if you get hurt and can't work, what if the auto makers in detroit totally shut down. what if obama tries to make being a dictator official, its better to flat out own your equipment either way, its a sign of stability.[/quote:11qnz2ma]

This is exactly my point- if those things happen I would rather (esp if I was an oo) have that 20, 30, 40, 60, or 100k where I can use it rather than in a piece of equipment that is not likely worth anywhere near that much. I am not sure what you don;t get Dave

 

[rick imby]

The best investment any of small businessman can spend is on a good Accountant. Mine has made me 100 times what I have paid him. Use him to evaluate a purchase vs a Lease not consulting with a bunch of BDCC's. Mr Snow your are excluded... Evaluating the options is what your accountant can easily do. Some leases are great some are not. The good leases are usually from Ford Chrysler or GM and are subsidized and cover your van and equipment. The more expensive leases are much worse than a loan.

It is rarely worthwhile financially, to pay off a lease in advance. You are better off to pay down different debt.

Let me say it again, Get a Good Accountant, they do not cost you they make you money.


*******
I was an accountant this is my experience and my opinion.


Missoula Montana

The latest Bicycle Racks for Cars

Carpet Cleaning Coeur D Alene, Idaho

 

[Brian R]

I am lucky enough to have the greatest accountant in the world. shiteatinggrin
They got me over $20,000 back from the IRS the fist year I used them. :shock:

I won't go into detail but life has been very good because of them...and we do it all in trade.

You said a lot Rick.

 

[Ken Snow]

Well said Rick, except the Mr Snow part~ makes me feel old :-)

 

[TimP]

A lease makes no sense when you aren't making a significant amount of money like me. For those who are like Ken who are buried in money it does make complete sense. I have no profits to write off so it makes no sense to lease anything again unless I double my business income. Even then I'd probably finance because I'm bitter about this lease.

 

[Ken Snow]

A lease makes no sense when you aren't making a significant amount of money like me. For those who are like Ken who are buried in money it does make complete sense. I have no profits to write off so it makes no sense to lease anything again unless I double my business income. Even then I'd probably finance because I'm bitter about this lease.

Wait a minute Tim, I never said anything positive or negative about leasing, only about letting others finance large purchases. Virtually all of my financing is bank financing for purchasing vehicles and equipment. The only leases we have are for personal vehicles that we do 3 year leases on and then turn them in.

On a separate deal we have set up a separate entity that buys Butler units (through bank financing) and then we lease them to one of our operating companies (Hagopian Cleaning Services). This is done for purposes of getting income to the previous generation patriarch and his wife.

I am not promoting or dissing leasing in general~ here are good ones and bad ones just like bank financing. You can pay too much for either, or if credit risk it may really just be comensurate with the risk the finance company (bank or leasor) is taking on someone with poor credit.

I sell 3-6 reconditioned Butlers a year, plus 1-3 other types of vehicles and at least one a year ends up not going through becuase the cleaner can not get financing due to credit problems.

Ken
Ps I assure you I am not sitting on any piles of money.

 

[rick imby]

Ken
Ps I assure you I am not sitting on any piles of money.

Most of my wealthy friends do not have any money, it is invested and hopefully working for them. Lately for many of them it has been hopelessly working for them. Many wealthy people have been hit very hard in this downturn. I know this only too well.

Rick



****************Never insult anyone by accident.
Robert A. Heinlein

Bowling Green Carpet and Upholstery Cleaning

Cleaning Carpet in Chico, CA

Rapid City Carpet Cleaning

 

[Ken Snow]

Most everyone has been hit in some way in this economic downturn. At the very least their primary residence is worth much less than it was. We have been devastated by it.

 

[Lee Stockwell]

Liquidity!

If you've ever been without it you don't forget it.

 

[Steve in Omaha]

Has anyone tried to pay off a lease on their TM equipment early as in the last year worth of payments.

I've got 12 payments left. As I understood I had to pay first and last payment up front plus a deposit. My statement says I've paid through payment 48 and I just got the invoice for payment 49 which is automatically withdrawn from my account on the 7th of October.

Anyways I'm wondering what they have done for you as in payments. Cause what I can see so far is they want more money to pay it off early than to just keep paying on it. My lease was set up with a $101 buy out at the end of the term so I don't have a large buy out.

I've got the cash to pay it off in the bank and I thought I could save a little bit of money paying it off early and then I wouldn't have to worry about a payment again. From my figures they want 2,000 more than I owe. :shock:

I'm getting it in writing so I can look it over I hope it's just an error. But I'm curious if anyone has looked into this too. Needless to say I wont ever lease anything again, especially from this company. Nothing but swindling.

If you leased it threw the same crooks that I did when I started my business and bought my CDS then you aren't going to gain anything by paying it off early.....un like financing if you pay off early then you save money on the interest....with the lease you will still pay them every over priced penny that they can suck out of you.....on the up swing...if you pay it off you can get the blood sucking leaches off your back once and for all and get it behind you....

Those were my terms a long long time ago...economics 101. Tim, 2 thumbs up!!! for making it to the end of a lease...paid up. It's a tough way to knock it out, but that what does not kill me...
Best,
Steve in Omaha

 

[Brian R]

Ken, he said your where buried in money...not sitting on a pile of it...there is a difference you know. :roll: :mrgreen:

 

[Able 1]

I'm working on paying off a TM that had a lease started in '06 I picked it up april 2010 with 9 payments left. :shock: The payments are per month are $700 there was a $500 lease transfer fee, and a $2,600 lease buy out. :shock: All added up it comes to to amount I agreed to buy it for (but damn! I couldn't imagine ever leasing again) This one is through Interlink... I asked the pay off amount they said there is a $50 charge for that!!!!

 

[tman7]

I am sooooooooooooo glad I said no to Interlinks "financing" approval.

 

[Ron Werner]

well, if financing isn't an option, having the equipment you need to do the work that pays for your lease and more and helps to expand your busn is worth the extra money spent/invested. It not so much an investment in the equipment as it is in your busn. Buy the right machine and you'll own it for years after its paid for.

 

[floorguy]

A lease makes no sense when you aren't making a significant amount of money like me. For those who are like Ken who are buried in money it does make complete sense. I have no profits to write off so it makes no sense to lease anything again unless I double my business income. Even then I'd probably finance because I'm bitter about this lease.

whats funny is


YOUR CASE IS A PERFECT EXAMPLE OF WHEN A LEASE IS GOOD....


you go explain that to a bank and see what they say...

as was said.....dont do it through the fookin suppliers though

 

[Ken Snow]

More like buried in debt, the money goes for ops and that.

 

[Brian R]

I still say having debt....and some available credit...is a good thing when running a company.
Think of this...you can't get more credit without having debt. If you want more later, chances are you will have to be financed.

One good thing about a lease (to totally contradict what I just said above) is it doesn't show on your credit. If you want a TM and Van and would like to buy a personal vehicle later the bank may say no if our debt to income ratio is off.
But of course half of your customers pay cash and you can't prove you make more than it shows and you still want that new pickup along with the business goodies.

The lease is like hidden financing

Just remember to lease first THEN go get financed for something else. Because the leasing company will look at your debt to income ratio as well.

 

[TimP]

A lease makes no sense when you aren't making a significant amount of money like me. For those who are like Ken who are buried in money it does make complete sense. I have no profits to write off so it makes no sense to lease anything again unless I double my business income. Even then I'd probably finance because I'm bitter about this lease.

whats funny is


YOUR CASE IS A PERFECT EXAMPLE OF WHEN A LEASE IS GOOD....


you go explain that to a bank and see what they say...

as was said.....dont do it through the fookin suppliers though

When I got into this business I could of financed it through my home equity line. I had plenty of equity in my home. The rate would of been 4-5%. I could of paid it off so much faster. And btw right now I do have a pretty good sum of money sitting in the bank to make sure I get through the spring when business is very slow. But I was unsure about the business making it so I went the lease option and I've paid through the nose for that "insurance" that I'm not even sure would of even helped me because this company tries to screw their customers every chance they get. Even though I have the money in the bank to take care of my business I can't take it out and pay myself, and that's how I got it by not paying myself. And I'm too afraid to pay my equity line or anything else in fear that I can't get the money back because I've had credit lines lowered on every single card and I hear it's going on with equity lines too. And a CD is a joke. My smartest option would be to pay this lease off and get the money drain off my back. Just so you know after I pay the lease off I only have 4-5,000 extra. That's not much at all to keep a business going.

 

[Ken Snow]

Even though I have the money in the bank to take care of my business I can't take it out and pay myself, and that's how I got it by not paying myself. And I'm too afraid to pay my equity line or anything else in fear that I can't get the money back because I've had credit lines lowered on every single card and I hear it's going on with equity lines too. And a CD is a joke. My smartest option would be to pay this lease off and get the money drain off my back. Just so you know after I pay the lease off I only have 4-5,000 extra. That's not much at all to keep a business going.

Tim- please talk to an accountant. From what I am hearing it sounds like the last thing you should do is pay this off with CASH. You are expressing concerns about surviving winter and how this loan is straining you, but at the same time have enough to pay it off. It sounds like their may be a discipline thing here cause otherwise why not just leave the money in the bank and pay down each payment as it is due. This is far less hardship than paying it all at once.

Feel free to call me at 248 291-2121 if you would like to discuss privately, as I don't want to write things that make you feel I am attacking your thinking.

Ken

 

[Lee Stockwell]

Ken would rather chew you out privately. :-)

Listen to him, if a business can thrive in Detroit he must be doing something right.

 

[TimP]

I'm not going to pay it off. I was only going to if I could do it for less than what I already owed. They want more so the money is going to sit. And I'm not going to invest or pay off other bills for the reasons above. I'm not worried about the immediate winter it just after christmas through around april that's bad. So that's what I have to hold onto it for.

 

[Ken Snow]

smart move Tim!

 

[floorguy]

its really that slow there during that time???

maybe look at expanding some services...

commercial?? dont people come to FL durning that time to get outa the fookin cold???

 

[TimP]

its really that slow there during that time???

maybe look at expanding some services...

commercial?? dont people come to FL durning that time to get outa the fookin cold???

I live in a really rural area. I don't get the tourists helping me. People like Joey and Curtis in panama city have a tourist area and they get to clean those high rise places on the beach with portables. It's a 50 mile drive to get over there. I service a 20 mile radius and there probably is 40,000 people on a high side and most people are living in poverty. Then I compete with other companies for the work also. Rex, and stanley steamer are the main guys. And then I have a couple others that come from towns around me that snag work here and there. Anyway what I'm getting at it's a residential market and it's small. I would do commercial in fact I do a lot of volume in school carpet during the summer I'd say around 150,000 sq ft. I also do work for juvenile institutions but only when they have an inspection and on short notice, I'd say I do 4-5,000 a year with them. I'd do more commercial but I don't know where to find it to where I can make a decent living. I bet most of the big commercial work goes for 7 cents a ft. And it's probably more about "who" you know to get the jobs cause that's how I get my big jobs.

Also btw, I've expanded to do vct. I also do cgd flooring installations. I avoid residential stretch in because the going rate is made for drunks who want to buy their next 6 pack. And I'll do odd jobs of other things when I have to.

 

[floorguy]

ahhh......expand the drive then.....

i just did a few jobs in 80 miles 1 way....tied in a few others along the way so its a nice $600 night....

but some of those are tied into a few jobs i do multiple places for them and have keys...


to me 20 miles is nothing