It's not all doom and gloom...

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mdshunk

mdshunk

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I'm not really a doom and gloom person, but I'd advise contractors who rely on open lines of credit to do business to not make too big of a leap here in the short term, counting on your credit line. Word on the street is that a credit line you have had for years might have gotten yanked today. Several of us found out today. :cool:
 
I have operated my business the same way I operate my home budget. If I can't pay cash I don't buy it. Except for my home I don't have any debt and I hope more Americans will wake up to this idea. It caused me to start off very small in business and growth is slower this way but at the end of the month it feels good.
 
quogueelectric said:
I like to be what you call a CASH COW. I do not need anyone to finance my material bills.
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That's great if you have a couple houses to wire next week. What if you have an office building to start wiring next week? Not using credit is the dumbest thing you can ever do when operating your business, and I'll state that to the very end.
 
mdshunk said:
I'm not really a doom and gloom person, but I'd advise contractors who rely on open lines of credit to do business to not make too big of a leap here in the short term, counting on your credit line. Word on the street is that a credit line you have had for years might have gotten yanked today. Several of us found out today. :cool:
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Reasons for credit line being yanked?
 
mdshunk said:
That's great if you have a couple houses to wire next week. What if you have an office building to start wiring next week? Not using credit is the dumbest thing you can ever do when operating your business, and I'll state that to the very end.
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I'll second that motion.

Unless you've got 6-digits worth of money in the bank, you're not going to grow without a line of credit.

Plunking down a couple thousand to buy material for the next house is one thing. But as Marc suggests, what happens if you need to start on a $250,000 job?
 
ceb58 said:
Reasons for credit line being yanked?
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guessing it has something to do with what's going on with lehman brothers and merrill lynch. Companies are probably trying to protect themselves right now.



I agree with marc on using credit as well. I'll pay cash for up to $1k or so in material on a job that will only take a day or so and is a long way from the supply house. I don't do many large projects but anything over that $1k limit is getting put on a charge account. You've got to manage your cash flow and spending it all on materials you could charge could certainly put you in a bind when the unexpected happens; like not getting paid.
 
I moved all moneys out of the stock market the banks are failing real estate is tanking the fed will certainly drop rates tommorow AGAIN. Making the dollar weaker. And all is in limbo until after the elections. I have seen this movie before and believe me it is a bad one. Theres a storm a brewin. I didnt say never borrow money,I just meant to stay as liquid as possible when times are uncertain. I have always made my customers finance thier own material bills. 1/3-1/3-1/3. Why should I risk my money on material??
 
quogueelectric said:
Why should I risk my money on material??
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Rather than paying the supply house for material today, wouldn't it be nice to play games with various forms of credit, and delay the actual payment of that bill for months? With no real interest penalty? That's what I'm talking about. When, precisely, you collect from the customer is another matter entirely. Ideally, you'll have money in hand from them already, to some extent.
 
mdshunk said:
Rather than paying the supply house for material today, wouldn't it be nice to play games with various forms of credit, and delay the actual payment of that bill for months? With no real interest penalty? That's what I'm talking about. When, precisely, you collect from the customer is another matter entirely. Ideally, you'll have money in hand from them already, to some extent.
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I used the same logic when I bought a ford explorer on a credit card at a very low rate. Somehow the outcome was undesirable. I of course rectified the situation but it is just too easy to say "CHARGE IT!!" Some people can actually do what you say however many cannot. Getting burried in debt is a terrible thing.
 
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