Blake Alberts, from B&B Lawn Care, discussed in his latest YouTube video the dilemma new business owners often face on whether to get financing for mowers, or whether to buy older but cheaper equipment for cash.
The main points Albert mentioned in the video are:
— It is better to take a ‘hit’ of spending the full price for equipment upfront rather than having it financed.
—Choosing the option of financing for mowers over cash can result in a difficult situation of meeting payment demands without any income coming into the business.
— Paying the full purchase price for equipment upfront means that the equipment belongs to the business, and even if there is no income in some months, the equipment is an asset and not a liability.
— Getting into debt while the business is still young and growing is more likely to end up in liquidation.
Alberts made a compelling case against going into debt unnecessarily by using financing for mowers and pointed out it is better and safer to wait and save while making money with equipment on hand rather than not being able to meet the credit card commitment.