- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Getting a line of credit at a bank @ 6.7%
Posted on 6/19/13 at 6:56 pm
Posted on 6/19/13 at 6:56 pm
50k line of credit to buy equipment to start a business at the above posted interest rate. Interest payment each month on money spent is the only monthly obligation.
Should I shop around for a better rate?
Anything I Gould be weary of?
First time doing something like this and kinda going in blind.
Should I shop around for a better rate?
Anything I Gould be weary of?
First time doing something like this and kinda going in blind.
4
Posted on 6/20/13 at 8:38 am to FelicianaTigerfan
Fixed rate or variable? If fixed then 6.7% interest only is pretty strong for a start up business IMO. Maybe someone else knows of a better rate/place but seems good to me.
Also is this an open-ended line or does it close after ____ years? If it closes after ____ years then find out what happens if you still owe a balance at that time.
Also is this an open-ended line or does it close after ____ years? If it closes after ____ years then find out what happens if you still owe a balance at that time.
Posted on 6/20/13 at 10:14 am to mglsu21
quote:
Also is this an open-ended line or does it close after ____ years? If it closes after ____ years then find out what happens if you still owe a balance at that time.
This for sure. The rate you have is good if you didn't have to put up the kids.
Posted on 6/20/13 at 10:16 am to FelicianaTigerfan
quote:
Getting a line of credit at a bank @ 6.7%
Secured? If not, thats pretty damn good.
eta: if it is secured, I would say its still pretty good.
This post was edited on 6/20/13 at 10:17 am
Posted on 6/20/13 at 10:26 am to FelicianaTigerfan
Good rate. Also is this fixed?
Good luck with your business.
Good luck with your business.
Posted on 6/20/13 at 10:27 am to rmc
Yeah I forgot to ask if secured or unsecured. Good either way but great if unsecured.
Posted on 6/20/13 at 10:30 am to mglsu21
quote:
Yeah I forgot to ask if secured or unsecured. Good either way but great if unsecured.
This if unsecured and fixed I would do it.
Posted on 6/20/13 at 9:03 pm to mglsu21
Talking with the banker is all foreign language to me but if I understand correctly the credit is there as long as I need it. He mentioned 25-30 years as long as I keep meeting my monthly interest obligation. Interest rate won't move as far as I understand it also.
Hopefully will only need about 35k of it and plan to operate the business the first year without pocketing any profits and putting everything towards principal and hopefully be a debt free business within 2 years.
Hopefully will only need about 35k of it and plan to operate the business the first year without pocketing any profits and putting everything towards principal and hopefully be a debt free business within 2 years.
Posted on 6/20/13 at 9:41 pm to FelicianaTigerfan
That's not neccesarily a bad rate but its probably not fixed as the vast majority of LOC's are variable in my experience.. Make sure to fully understand the rate process if its variable and the whether or not the loc can be called due.. You don't neccesarily need to understand all the ends and outs but cover your arse and ask questions when you don't understand.
Posted on 6/21/13 at 10:35 am to TROLA
quote:
He mentioned 25-30 years as long as I keep meeting my monthly interest obligation. Interest rate won't move as far as I understand it also.
This doesn't sound right. Plus a line of credit for a start up business to purchase equipment typically doesn't exist. You better make damn sure he's not expecting to take a 2nd mortgage on your house. This is what it sounds like to me.
A typical equipment loan is going to be a closed ended term loan for typically 4-5 years, financing 75/80% of the cost and termed out. Every time you buy a new piece of equipment it's a new term loan.
A line of credit to purchase equipment would never make it past underwriting as you'd never pay the loan back making interest only payments. Your equipment would be outdated and/or broken, you'd still have a line balance, and then you would need to borrow more money to buy more equipment while you haven't paid for the first equipment purchase yet.
Only the big boys have equipment "guidance lines" at banks. Unless it is just one shitty bank you are talking to.
I'd proceed with caution
Posted on 6/21/13 at 10:41 am to FelicianaTigerfan
This isn't adding up for me. Also what kind of business? I can tell you if it would work here.
Page 1 of 1
Back to top
Follow TigerDroppings for LSU Football News