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I would look at an asset finance company who will secure the loan against the asset, probably with more favourable terms than an [unsecured] loan.
personal loan interest rate hopefully about 3 to 4% a.p.r. depending on credit rating, maybe over a 3 year repayment period (but can always be settled early) or even buy the mower on your credit cards and do a bit of juggling afterwards to minimise the interest
my recommendation is not to borrow any money.............. if you can't afford 16k, get something a lot cheaper that you actually can afford.
If he's done his calculations correctly and knows he can get a return on using the £16k mower, then why not? I bet at least 50% of LJN members have a van on some sort of finance plan (I appreciate there being a difference as the ban is an essential tool).
That's a fair point but it's a huge amount to borrow with large repayments involved and it sounds like John already has a loan with Tesco.. I certainly wouldn't want that hanging over my head. So many people borrow money to buy a vehicle/machinery when something cheaper/smaller will adequately suffice. Is it actually working taking on the work that this machinery necessitates when you consider the interest payments, depreciation and running costs? I'm sure John could getaway with spending far less than £16k though please correct me if I'm wrong:) .
It sounds to me that John already has the mower and it is currently financed with a Tesco loan and he wants the loan extending. Maybe it is some kind of a balloon payment loan that will end leaving a large enough figure that needs to be re-financed.
[It might have been clearer if john had typed a little more slowly]
I have no recommendations as I have not had any kind of loan/mortgage/finance for ten years now. I would have thought though that the bank that you have your business account with would be the safest and least complicated bet.
Really provides an interesting insight into people's business attitudes. Some want to expand their business and some are happy to stay as they are.
When there's a business case with a reasonable ROI, then looking around for the best finance solution is a good move, whether it's a one-off or consolidating loans.
A lot of the major equipment dealers have access to business finance companies that can structure loans to suit at good rates. Also they win on flexibility that high street lenders don't offer.
Surely, a growing business needs capital supported by a business plan to suit?
We've used business asset financing previously to our benefit.
A question worth asking to get advice and consider all options .
John might prefer finance if he has the work for this machine
Often businesses have the funds to buy outright but dont want to tie up all their working capital or use savings .
We have found either asset finance or HP have lower interest rates than either personal or business loans and they are easier to access as the loan is secured on the equipment/vehicle unlike personal or business loans which are unsecured.
The other advantages are that you actually speak to someone rather than the computer saying no! We have used Close and Lloyds Black horse, going with the cheapest, there are plenty to choose from and they are all anxious to lend, have a ring round.