Home – New Forums Money matters regular wages

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  • #975972
    Fustrated
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    I am in a family business, in constructions. Its been going for about 3 years, we are always working we never have trouble in getting work, we would like to expand and employ more staff.
    But we can’t pay ourselves regulary let alone somebody with no stake in the company.
    I think our expenses are to high we have six different loans on our trucks/machinary. I have suggested that we consaludate the five loans into one to free up more money for wages and to expand.
    But everyone else thinks it’s a bad idea because you are paying it off over a longer period.
    So I would like to know what do other companies do, if they have 10 vehicles do they have 10 diffarent loans or one loan for all 10 vehicles.

    #1077827
    MattR
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    For business clients that use their machinery/vehicles exclusively in their business (e.g. as builders and utes) I tend to encourage the use of a loan for that machine/vehicle that represents the life of it in their business.

    Typically they work a ute for 4 – 5 years and replace, so I have no issue with a loan for the ute for that time. If they squeeze another year of life out of it, that’s a bonus. I wouldn’t want them paying for it after its useful life has finished. So I wouldn’t be in favour of consolidating in this type of scenario.

    If they have mutliple loans etc. then I would encourage them to either use a good broker who knows that regular business is coming their way and assist with good finance, or develop a relationship with a lender. Either way let them know that you are doing a loan a year so would like to be looked after.

    I suggest look at what you are charging, and your cash flow.

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