Mobile Grooming Financing
I'm seriously determined to open my own mobile grooming business. My huge issue is financing. My head spins just thinking of it. My personal credit is not the greatest and I shudder just thinking of getting turned down for a loan multiple times. I currently have a registered home based grooming business that I'm trying to use to establish business credit and income. It's going on 3 months now.
-Can a the mobile grooming van be used to "secure" the loan? Like a car loan...if you don't pay they take it back. I have no assets to secure or put up for a loan like a house. A co-signer is pretty much never going to happen. Either is borrowing thousands from family members.
-How does everyone finance not only the van/bus/trailer, which is $20k-50k but then gets enough of a loan to cover the other aspects of the business? (advertising, additional supplies, wrapping the van/bus/trailer) From what I see everyone saves up $5-20k before opening their business. If I could save up that I'd be 100% debt free and have my house paid off.
-Which is better to get financing through? A bank or a credit union? What are average qualifications for someone to get a $60k business loan? (average credit score, yearly income, etc)
-Would any people selling their mobile units be willing to accept payments instead of a lump sum? Is that disrespectful to ask? Is it a possibility? (like maybe a large downpayment of $2-5k, then payments every month like you would to a bank)
Any other advice? I get so discouraged looking at the numbers and trying to find a way to make it work. Nothing feels worse than getting all excited going to the bank, then getting turned down for a loan. This happened with my house...twice, and it' s devastating.
Unless your business is a corporation you aren't going to be able to build up business credit separate from your personal credit. It's all tied together.
My advice would be to work on improving your personal credit while saving up money.
I went into my venture Cash all in 4 months ago. I didn't want to have a loan hanging over my head.
I suggest getting Grooming Business in a Box. http://groomerbox.com/business-plan-helper/
Its worth the $100 bucks.
Create your business plan for the software. Go to the bank with Business plan in hand. Have all your ducks in a row.
They will want to see a business plan if they are going to lend you money.
I just recently bought a new van from Wag'n Tails and they made it pretty easy. Dennis said financing is easier to get for a new vehicle than for a used vehicle. Wag'n Tails got all the financing done for me and Mercedes gave me the best terms and financing options for the vehicle I wanted. He also told me that had I chosen to go with a Ford or Dodge van, financing would have been faster, easier, and much lower down payment. When I approached both of my banks, Chase and BoA, neither one offers commercial vehicle loans for small businesses. I have excellent credit and the required down payment, so I'm sure that helped get what I wanted.
Personally, for me, I did NOT want the headaches of maintenance issues from a used vehicle like what might be available at the price range you mentioned. You might be able to get owner financing if someone was desperate enough to get rid of their vehicle, I don't think it would be rude to ask. But I really would be wary of a used grooming van that someone would let you make payments on. I shudder to think of the hidden problems you might encounter, which would then leave you unhappy, in a contract, with van payments, and potentially vehicle problems you can't afford - leaving your van sitting parked in your driveway. It's not something I would do.
I second what cockerlvr recommends. Save up to buy a van, new or used, and RESEARCH, RESEARCH, RESEARCH what you do and don't want in a van, why certain equipment might work better for you and why (i.e., diesel engine v. gasoline, generator v. battery bank, inverter system, etc.). I read and researched for over a year before buying. And obviously, improve your personal credit. That, and money to put down are the most important factors for getting financed.
Finally, you might want to consider buying a trailer to get started in mobile. There are some very nice NEW ones available in the $20k range. I would be more confident buying one of those than a used grooming van with lots of miles and a used generator, but that's just me.
Not true. If your business has a separate EIN number you can build credit through it. My old boss wasn't even an LLC until the 5th or 6th year she was open but she had amazing business credit.
Originally Posted by cockerlvr
Not true. I am a sole proprietorship with an EIN so I don't have to give out my SS number, and my business credit is based on my personal credit, not on its own. This is a brand new business with zero credit history and not even in existence at the time. Chase gave me a business credit card, with a higher credit line than any personal credit card I possess, based on my personal credit. Your old boss likely had amazing business credit because she had amazing personal credit, and history.
Originally Posted by pinky4289
Last edited by SandyinAnaheim; 01-09-17 at 10:10 PM.
If a payment arrangement might benefit the person selling the van and benefit you, it's not disrespectful to suggest it.
All I can say is be very careful. Debt can ruin a person's life.
You need money to make money is the saying. Starting a biz is not easy or everyone would be their own boss. For us a big lawsuit settlement allowed me to buy a new van from wagn tails.
You need good credit to get a vehicle loan as vehicles are a depreciating asset. Anyone here who bought a brand new van just kissed 10 grand goodbye soon as they took the keys from the manufacturer. You could not sell your 1 day old groom van for the same price you just signed the contract. That's why you cannot use a vehicle as collateral against a loan.
Your best bet is getting a van to convert on your own or a trailer which can be had for less than 10 grand
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Well....it all depends were you want to groom, in regards of purchasing a trailer. All of the neighborhoods that I groom have limited space for parking out front, due to the mailboxes and driveways, plus sharing the parking with landscaper's trailers. You will also need a fairly large vehicle to pull a trailer, ie pick-up.....so you are talking about taking up a long area in front of the house. You will most likely not want to park in any driveway, because you will have to back out onto a fairly narrow street and most driveways are at an angle for rain runoff....making the amount of bath water in your tub more.
I would suggest you contact the company that makes the mobile van. WGT made it very simple for me, doing all of the paper work.
Happy purchasing a new van
Dolly's Barking Bubbles, LLC
Has anyone ever invented a mobile tub that is on some sort of float system, hanging like, and it levels out when you park on inclines. I know, just a fun question!
Originally Posted by Dolly
Originally I intended to post that I do rarely see vans for rent in the ads here. Any mobile friends that know you won't interrupt their businesses and let you rent theirs by the day?
You can do it with little amount of money. I started my business once I bought a trailer with cash I saved I got it for 6000. I looked for months till I found something in my price range. I did have a vehicle I was able to tow with already. My business license cost me 35 and to get my LLC cost 50. I did go and speak with the small business Administration here in my town they helped for free. Look up and see where one is in your town. I was fortunate enough to already have customers wiling to follow me once I left petco. Also once I got everything lined up I did a fundraiser for the humane society 5 dollar nail trims one Saturday from 9-2 and raised 365 dollars I gave it all to them and was able to write it off as a tax deductible. But it got my name out there. Also park it at wall mart during the weekends when I wasn't working for free advertising and use facebook. I was really worried about what people would think for my trailer since it's old and not high end but if you have a good personality and a good groomer people will look past that. I used groomer choice free samples and they give you a lot to start up. My insurance is about 150 a month. Now I have been in business for 5 years looking to buy a new trailer and hire someone else. I haven't taken on new customers in over two years except when I feel like it. My tow vehicle was broken down I had to use a u-hail trucking till I was able to find another one in my price range it's old a 2001 2500 Chevy but it does the job. Fortunate for me I was the only mobile in town with about 11 shops or home base. I called around to find out what everyone else was charging and did my prices from there, since then I have raised them. I will be selling my trailer once I get a new one in the next two month. If your interested I will be selling my trailer for 3500 might be something you can afford. Then you won't be working to pay off a loan. Best of luck!!