[KustomKoncepts]

Am I the only one who can't seem to get financing for a cnc Router???

I have been to several banks and they all say the same thing NO!!(nuts)

I need about $30,000 for a cnc router. I am a 5 year old business with annual sales of $130,000.

I am only a one person shop with about $80,000 current debt.

My shop costs $63,000 annually.

I live off of $500.00 a month or $6,000 a year payroll. I have no home or, vehicle payments, medical problems, or dependents.

What is sending the bankers into a panic and run away from me?

I can try a leasing company they look at equipement differently than a bank but they rip you off so bad.

A 30K leased will cost me 42K in 5 years,
the interest lost to them is half of another cnc machine!!

What have you all done to get your equipement?

Thank you

[DRD]

Your in 80k in, and a high risk to the bank. The bank looks at if they give you 30k, and you don't pay them, what will they get for the machine if they have to sell it?
We just purchased a new Hass , we have perfect credit, have money in the bank, pull down alot of money ever year in sales, and the bank still wanted to see some money down. We put 20% and no questions asked period by the bank, loan was done. Bottom line is, the bank wants to see you comit to them, they will go along with you. Very rarely will the bank go 100% on the loan.
We could have got the loan with 0 down, But the bank wanted to see 5 years of taxe returns, and company profit and losses, so they wanted to dig deep, really deep. I was told by the guy that made our loan, that alot of loans on machines go into default, and the bank is at a loss.
Your 30k router is now worth 15k to the bank on the street, if you they have to sell it.

Good luck.

[KustomKoncepts]

I put up my $13,000 cd's as collarteral and I have $7,000 in roth iras at that bank but they won't use them as colateral.
I also have $3,000 in mutual funds.
that is 23K

should I cash out of this bank pay the penalties and put 20K toward my 28K router then I only have to come up with 8K more?

He asked me if he could put a lean on my business I also have a net worth of $70K but that is in a perfect world where they can sell all my stuff a a good price to get there money back.

a lease company does not ask to many questions. but it will cost me $8,600 in interest for my 28K lease to onw payments.

[307startup]

Kustom Koncepts

That's a tough one. I have a completely different philosophy in business, and it comes from one of my bosses who also happens to be the step-father of my ex-gf. Buy when you can afford it, work it til it breaks, never buy on credit. Ever. That way when times are tough, you can still make it through because you owe no one.

I have a car loan and a home loan. I'm working a second job to pay off the car as quickly as possible and pad my savings. My home loan will be paid off in 15 years instead of 30 because I make bi-monthly payments and drop my profit-sharing and tax returns into my principal.

I am starting a business and am purchasing all my equipment as I am able. I know that it's tough to realize that you could make a LOT more money with the equipment, but that's ONLY when times are good. When times get slow, that payment is a liability.

[KustomKoncepts]

yeah I know I really want this machine as I try to keep growing and diversifing.

I will be 28 years old in febuary, I should be much farther in life than I am, I started KK in college at age 20.

the last 5 years of doing this full time I have had a growth of 20% to 30% in sales and a 5% to 10% less in cost of goods sold.

but I seem to spend and add overhead that keeps me on a growth but also on the edge. I had $870 in the bank today with $5,600 in bills in 10 days. with $5,000 in recivables.

Gut check time, I kill myself but it is like alcoholism I run right on the edge. (I quit drinking 7years ago)

[cabnet636]

15 years ago. now we can get down to business

back soon cabnet

[KustomKoncepts]

Cabnet I think you know a little more about my situation and you also understand what real life is like for most of us.

No directed toward you WYLD but I would have to say that someone who says only buy stuff with cash and not on credit have the cash to do that in the first place!!!

there is a large steel supplier here 100,000 sq ft 150 employees strong, he says that everything was bought with cash, building, overhead cranes, semis, fork lifts ect.

so what he was a millionare before starting that so yeah he can pay cash for it all but how about the mass majority of us.

There is no chance with me being like that. I grew up in a trailer house and my parents are still in the same trailer after 25 years, My parents are blue colar workers, and I will never even have 30K laying in the bank cash to get this cnc.

People who where born rich or have inheritance can buy every thing straight up cash and never need a loan.

anyone who says money can't buy happiness has never been broke!

The economy looking at a resession isn't making my gut feel much better nor is it for my banker when the banks have taken a huge loss in the housing sector, that is also a reason I feel that the bank will not give me this loan.

[307startup]

Kustom Koncepts

I am an Army vet. I too was an alcoholic. Been sober now for 6 years, 3 months and 3 days. I know how that goes.

As for being rich, I am far from it. I managed to save $20,000 while in the army. I delivered pizzas at night when I could and used that for play money. The rest of my paycheck I put in savings & cds. Me and 5 buddies pooled our money, resources & talents to start a restaurant. It was tough going for the first six months, but between word of mouth and hard work we made it. I sold the majority of my interest in the restaurant (we now have 6) and earn a small, but steady income from that. I work as a machinist for a local shop. Well, technically, I am the shop. I have two lathes and a mill. They brought me on board because my ex's dad had enough confidence in my abilities to help them out. Now stuff that used to go out to other shops is handled in house. I make a decent living from that. My house cost me $78,500, purchased on a sub-prime loan. It has 1200 sq/ft with an attached garage. Far from pimpin or luxurious, but it suits my needs. I drive a 2004 Toyota Corolla. No rims. I live simply, but whenever I have a big enough chunk of money I buy equipment. My garage is nicer than my entire house.

I still deliver pizzas at night. Who can say no to an hourly wage and cash tips? I average $35 for 3 hrs in tips. Enough to live off of and have some pocket money. My day job pays the bills and the rest goes to savings or cds. I also attend night courses at the local community college on my own dime. I use my ACF/GI Bill to help support my hobbies.

I am 28 and have more than my parents. I hope to be able to help them out when they need it.

I understand what it's like. I just have to have patience and ride this out til I see my opportunity, just as I did with my restaurant.

I'm sure that you can too...

[cabnet636]

lease one major step in my growth, my edgebander yes i put 5000.00 down
on 24000.00 and interest on a lease is comparable. my only rule was this,
that my payment be manageable in the worst of times. sure i paid a little more. but the money that machine made us is far greater. self employment is a risk. like you i have been self employed all my working life. i do not reccomend it to anyone. i have survived all that has come my way reccessions or not. banks do not understand equipment nor what to do if somthing goes wrong. it does not surprise me that they wont play.

lease companies know where to market the machines if they have to take them back, they are not crooks just specialist in the equipment trade.
many of the agents i know surprise me with what they know about cnc.

i would also urge you to consider what you could do with a machine of less upfront involvement (used or new) i built my first verticle panel saw which i went to a trade show and stared at 45000.00 saw pining for it.. went home found linear bearings built me a carriage and off i went. build your own
cnc there are a lot of possibilitys.

now that i have owned acnc for two weeks i must say i am backing away from
the need for the extra spindle that i was so adamant about. bill has been so practical and has told me to wait and check machine before i go spending money. now that i am operating it setting z and bits just is not a big deal.

i can see alarger machine in my future and ultimatly this machine will play second fiddle however it will have paid for the other
you will get a machine. we will talk more about this call me tommorrow

jim mcgrew cabnet

[cabnet636]

it was 20 may 1993 at 5:30 pm, she was on her way out the door and hell was walking in behind her.







it became a great time to have my last drink

cabnet

[307startup]

it was 20 may 1993 at 5:30 pm, she was on her way out the door and hell was walking in behind her.







it became a great time to have my last drink

cabnet

What form did hell take?

[Denny J]

One other thing to look at is the amount of sales you have, whether you can meet your sales with your current equipment, and whether you need to hire more employees if you do not purchase the equipment.

For example, one employee making 10 dollars an hour costs you 400 a week just in wages. That does not count employment taxes,unemployment insurance,workers comp, etc.

So in a month you will pay that employee 1600 dollars plus the above costs.

Now, if you were to purchase the CNC and the software to operate it, can that machine plus you do more work than that employee plus you for the same money?

also, if you are turning away work because you cannot keep up, that is a situation where you may look at financing.

Here is what I suggest and what I am currently doing:

go to your areas small business development center and sit down with them. They will help you to write a business plan, develop a marketing strategy, and run some financial numbers to see whether your plan can cash flow at the levels you are projected to be selling. In my area they also offer gap financing and have some more programs tied to economic development that can provide more assistance based on projected job creation.

The business plan is the key. It will help you define what you want to do,how you plan to do it, and what you need to do it. If your plan is sound it will give you confidence and direction and it will show the lending agencies that you know your business and your direction.

[Mariss Freimanis]

KustomKoncepts,

Your story sounded grim until I read you are 28. Good grief man, look at what you have already accomplished! Cut yourself some slack, give yourself a little credit and look where you are going and what you have done already. You are focused and organized about life; I'll bet most of your friends aren't.

You are so far ahead of where I was at 28. I had $500 in the bank and no clue what I was going to do with my life; not a one. 30 years later I'm doing very well indeed, I don't owe a cent to anyone anywhere and I can pretty much have anything I want. That's your future. Here's how to get to it:

1) You want a router and the bank won't buy you one? Build it yourself. A few hundred bucks and you have one. Learn stuff. What you build may be rickety and crappy but it will earn you money. It will earn you enough money you will be able to buy the one you wanted, cash, in a year or so. Never underestimate the power of bootstrapping. You want something, don't let anything stand in your way. You are a smart guy, find a way around obstacles in your way. Learning along the way to getting what you want is never wasted either.

2) Never owe money. Debt is a leech that sucks your life's blood. You want something but you can't buy it cash? Do without, work around it but never borrow to get it. Your first house is the only exception. Car? Buy a junker. Router? Build it yourself. Anything else? Save.

You owe money. Make it your #1 priority to make it go away starting now. You will so thank yourself years in the future when something big you want is say 5 million and you have it in cash.

3) Marry a good woman. It sounds really dumb but it really works. People do best traveling in pairs when it comes to wealth and success in life. It just seems to work that way. She will crystallize your ambition because most men make their best accomplishments in the name of someone else other then themselves. It's built-in if you don't know that already.

That's it. You are a smart and ambitious guy. Use your brains, never let things stop you. You have already shown you have the needed discipline to correct and organize your life.

Mariss

[ViperTX]

KK....seems that you're doing well...at least you have a plan.

A few questions....from your financials seem to be lacking some info.....net profit....also, how did you get $80K in debt? Is the debt growing or ?

[KustomKoncepts]

Thank you for all your words of encouragement.

I don't think I have the disapline that that you all think. Growing up in a small farming comunity with very little I feel those where the best days of my life I never knew what I was missing until I went to college in the big city I started to meet and see the spoiled rich kids that got a new Mustang or escalade just for a HS graduation present. Also seeing the Milliondollar houses lining the river bank with big boats and jet skis.

I feel that is the point in my life that I became bitter toward anyone who has more money than me, wich is a lot of people. that is when I start my shop because I felt that was the way to be like them. 7 years later bringing in over $600,000 total sales I still feel I make nothing. I have a captive audience of customers and I feel if I don't keep wow'ing them now I will slowly lose their interest.

I am a simple sign and graphics shop. If I ain't unique then the Speedy print at the mall could make it. I have to develope and design unique stuff or I get lost in all the other sign shops in town.

the attachements make nothing to do with cnc routing but it is a example of the Unique, out of the box thinking that I use as a business model.

The race car is a sample of a process I developed by acident. It is a holographic film using my 54" ink jet printer. Designed in Photoshop and adjusted to make the inks semi Transparent allowing the holographic to shine through. I was the first and only shop in my area to do this. Not saying some one else has not done this before. every other shop here has tried to copy cat me on in now.

The sign that I have donedid not take the technicalities needed by a CNC to do but would give better faster repetable results, the little signage that I have done that have cut out shapes has been very popular. Currently I cut these shapes by hand

[KustomKoncepts]

Viper

2006 sales 127,000
net 18,500

so no I am not doing good because I have so much overhead I spend every penny I make.

80K debt

Lease on 54" printer $32,000
Paint Booth 12x12 $18,000
61" laminator $7,000
Vortex spray liner system $20,000
Sign lab program $6,500
custom computers $4,000
aurora programs $3,000
Juice drops program $7,000
remodel shop $12,000
central air $2,500
plasma cutter $1,200
welder $800
air system refrided air dryer $4,000
misc tools $3,000
smowmobile $4,500
enclosed trailer $4,000
astro van $2,100
tool box $1,000
island clean air system $6,500


total debt from start to date $139,100

Iv'e managed to pay down 59K of it over the last 5 years

monthly payments are aroun $5,000 monthly
total opperating overhead costs and loans and lease's

I pay myself $6,000 a year.

[DRD]

I put up my $13,000 cd's as collarteral and I have $7,000 in roth iras at that bank but they won't use them as colateral.
I also have $3,000 in mutual funds.
that is 23K

should I cash out of this bank pay the penalties and put 20K toward my 28K router then I only have to come up with 8K more?

He asked me if he could put a lean on my business I also have a net worth of $70K but that is in a perfect world where they can sell all my stuff a a good price to get there money back.

a lease company does not ask to many questions. but it will cost me $8,600 in interest for my 28K lease to onw payments.

Talk to the bank, and ask them what's is it going to take to get a loan the equipment. The bottom line is, you need this machine to move forward to grow, just like many companys who don't have a huge chuck of money up front. And if you did have the money up front, and used it to buy your machine, what happens when times get slow? and you need money to stay alive, your screwed.
Buy cashing in the your some of your investments for a down payment, this will let you buy this machine, your young.
I am highly against building machines if your a company, I have built many cnc machines, and the time and money it takes to get them right, your better of buying a proven product and be done with it.
The tax breaks are allowed up to 125k deduction on equipment purchases, so you can write it off, for the next 5 years.
Your young, roll the dice and win. Don't look back in 10 years and say, should have, could have, would have.

Go for it!

[KustomKoncepts]

Here is another example of why I want a cnc.

this is my new sign, it is a good example of how New aged Digital graphics and cut shape demention work together.

the KK logo is raised and bowed 12 in. away from the base.

4x8 Alumicore base and Poly metal for the KK, Poly metal is a 1/8" formable material that is how it holds the curved face.

total weight of this sign was 32 Lbs

[Denny J]

If you are making signs, have you looked at the used shopbots? You can pick them up for a very low price and they will do anything you want them to do for signwork and pay themselves off quickly.

Then when you get the money put away,buy one of the cnc hotwire foam cutting machines and you will have a great amount of work open up to you

[KustomKoncepts]

I have heard about a cnc hot wire but what is it?