[chris1]

Sounds like it's SBA(or other) backed.

[GMAN]

Originally Posted by no_worries

Unless you have an established business with the correlating business credit history, the underwriting procedure is going to be all about the individual...hence the personal guarantee. Whether its a business or personal loan makes little difference in the terms; it all boils down to the perceived risk. Once that's been established, you can tailor the terms to pretty much anything you want. It's all just a trade-off between length and rate. The sole fact that it is a business entity doing the borrowing does not answer the question, "From where will you generate revenue?"

You don't need to be an LLC or corporation to secure business credit. Simply establishing an EIN is enough to allow a sole proprietor to build credit separate from his personal. While you can't separate yourself legally from the obligation with this form, as soon as you sign a personal guarantee you eschew any protection you might have had with an LLC or corporation anyway. And banks rarely lend to new entities without that guarantee in place.

I've never done business as a sole proprietor and I've dealt with banks in various capacities when it comes to business lending. Obviously, they are satisfied with their level of risk in this case; probably due to other assets/income available. But I'm still surprised they don't require more in the way of revenue assurance. Then again, given what we've just gone through; much of banks' behavior is puzzling.

Some types of lending is only done to companies. The risk might be the same. It is only how the loan is structured. From his post, he may also be a member of a minority. There are loans that are available to minorities with different requirements than those who are not considered minorities. In any case, it sounds like he has his money lined up. I don't think that is would be an SBA loan, since they don't lend money for class 8 equipment, unless their policies have changed. They also don't make decisions that quickly. With SBA, they often will require significant assets to be pledged to cover some of the risk. Perhaps he does business with a smaller bank that he has had a long standing relationship. That can make a difference when it comes to this type of loan. I have done business with banks who state that they don't lend money on class 8 equipment, but gave me money anyway due to my long relationship with them. That happened with two lenders with whom I have done business. He also mentioned that he was making a significant down payment. A good down payment can make a big impact on the comfort level of a lender. They like to have a debtor have money in the mix.

[wheelturner]

Originally Posted by GMAN

He mentioned that his bank requires him to set up a LLC. That tells me that the bank is more than likely setting this up as a commercial loan or a commercial line of credit rather than as a personal loan. He will probably need to give a personal guarantee, but the terms are different than when you buy a truck as an individual. They may or may not require a signed lease agreement or an intent to lease from a carrier for this type of loan. Terms could also be stretched out beyond a personal loan with this type of financing.

I've got two personnel loans and one business loan approved. I'm going with the business loan, better rate and terms. I don't have a minority loan, but I am going to list my wife as 51% owner of business. I was ask to provide a lease agreement for one of the banks, but wasn't able to provide because didn't have available, so I moved on to the next bank. The interview I did over the phone was with the business loan (bank) I ended up going with. I do have the assets for emergency, and could probably come up with the full list price of tractor, but wouldn't be establishing business credit then. I know I'm taken a big risk on this venture, but I'm only 32 and I can afford to gamble a little. That doesn't mean that I'm just going to jump right in with my eye's closed. I'm going to get my all.

Also, I'm going to create an EIN with my service company, my accountant told me to create it with my (name) on it operating as (company name) and then create LLC . With LLC I am able to include business in my personal taxes under column C. No sense in paying business taxes when I am sub contracting the work out. In a way I'm a sub contracted worker for LS as well, if accepted.

I've got a occupational accident policy lined up, not workers comp. Because with workers comp I won't be covered under policy as owner. But will be along with driver under occupational accident coverage.

Sorry guy's for jumping back and forth with subjects, I keep going down boards and reading questions and coming back up and answering questions.

GMAN,how many trucks are u running right now and with who If you don't mind me asking ? Also, which company do you recommend me trying for situation I'm in, maybe easier load board, better dispatching, works in the south, and doesn't have as much of a one way street ?

And no_worries, r u also O/O ? It sounds to me like you work at the bank or spend a lot of time in banks ?

Anyways you guys both rock !! I appreciate your help,and have made changes based on your advise, I feel a bit stronger going into this, wheelturner

[wheelturner]

Fixed Monthly Expenses:
1443.00 monthly (tractor) after 9500.00 down payment
500.00 monthly (trailer) after 3750.00 down payment
248.00 monthly (insurance) after 495.00 down payment
140.00 monthly (occupational accident policy) 2 mil. coverage
545.00 monthly (escrow, plates, and permits) LandStar deductions
1000.00 monthly (maints., tires, servicing,ect.)
4000.00 monthly (driver @ 1k per +2500 mile wk and @ 800.00 at -2500 miles wk)
94,512.00 Annual; 7876.00 Total Monthly; 1969.00 Weekly; 315.04 Daily @ 25 day month

Total does not factor in diesel, comdata, IFTA surcharges,communication devices fees,
pre-scale receipts,tolls, or service company. As expenses may vary.

1500 mile wk 2000 mile wk 2500 mile wk 3000 mile wk 3500 mile wk
expenses: expenses: expenses: expenses: expenses:
Fuel 850.00 Fuel 1139.00 Fuel 1417.80 Fuel 1700.00 Fuel 1985.60
Exp.1969.00 Exp.1969.00 Exp.1969.00 Exp.1969.00 Exp.1969.00
total: 2819.00 total: 3108.00 total: 3386.80 total: 3669.00 total: 3954.60
cpm: 1.88 cpm: 1.55 cpm: 1.35 cpm: 1.22 cpm: 1.13

Exp. /Expenses , cpm / cost per mile ,diesel @ 3.40 gallon and 6 mpg.

Profit Per Week /Mile (minus cost per mile)
1500 mile wk 2000 mile wk 2500 mile wk 3000 mile wk 3500 mile wk
cpm: -1.88 cpm: -1.55 cpm: -1.35 cpm: -1.22 cpm: -1.13
@1.75= -194.00 392.00/ .20 988.20/ .40 1581.00/ .53 2170.40/ .62
@1.80= -119.00 492.00/ .25 1113.20/ .45 1731.00/ .58 2345.40/ .67
@1.85= -44.00 592.00/ .30 1238.20/ .50 1881.00/ .63 2520.40/ .72
@1.90= 39.00 692.00/ .35 1363.20/ .55 2031.00/ .68 2695.40/ .77
@1.95= 106.00 792.00/ .40 1488.20/ .60 2181.00/ .73 2870.40/ .82
@2.00= 181.00 892.00/ .45 1613.20/ .65 2331.00/ .78 3045.40/ .87
@2.05= 256.00 992.00/ .50 1738.20/ .70 2481.00/ .83 3220.40/ .92
@2.10= 331.00 1092.00/ .55 1863.20/ .75 2631.00/ .88 3395.40/ .97
@2.15= 406.00 1192.00/ .60 1988.20/ .80 2781.00/ .93 3570.40/1.02
@2.20= 481.00 1292.00/ .65 2113.20/ .85 2931.00/ .98 3745.40/1.07
@2.25= 556.00 1392.00/ .70 2238.20/ .90 3081.00/1.03 3921.00/1.12
@2.30= 631.00 1492.00/ .75 2363.20/ .95 3231.00/1.08 4095.40/1.17


I finally got done with it. I changed 7mpg to 6mpg. Added a 1500 mile week. Added occupational accident policy to expenses.
Changed driver pay 1k per wk, but with catch. Also changed maintenance to 1k per month from 700.00. Please let me know what u think ???

[wheelturner]

sorry guys, I copied and paste my spread sheet to board but it keeps coming up squeezed all together. It very hard to follow with it like that, I'll try it again. Please let me know if there's a trick to it ?

[wheelturner]

New Text Document (2).txt

here lets see if this works??

[no_worries]

Originally Posted by GMAN

Some types of lending is only done to companies. The risk might be the same. It is only how the loan is structured. From his post, he may also be a member of a minority. There are loans that are available to minorities with different requirements than those who are not considered minorities. In any case, it sounds like he has his money lined up. I don't think that is would be an SBA loan, since they don't lend money for class 8 equipment, unless their policies have changed. They also don't make decisions that quickly. With SBA, they often will require significant assets to be pledged to cover some of the risk. Perhaps he does business with a smaller bank that he has had a long standing relationship. That can make a difference when it comes to this type of loan. I have done business with banks who state that they don't lend money on class 8 equipment, but gave me money anyway due to my long relationship with them. That happened with two lenders with whom I have done business. He also mentioned that he was making a significant down payment. A good down payment can make a big impact on the comfort level of a lender. They like to have a debtor have money in the mix.

SBA will lend money for class 8, you just have to know what questions to ask. That was one of my options a few years ago; took about a week to get a decision and they didn't require any additional assets. They do have higher down payment requirements; don't remember now but it seems like 30% or so. I ultimately didn't go that way because I received better terms elsewhere.

It appears that some banks did have stricter requirements (good to hear) and that the OP had to shop around to find more favorable terms...good move.

[no_worries]

Originally Posted by wheelturner

I've got two personnel loans and one business loan approved. I'm going with the business loan, better rate and terms. I don't have a minority loan, but I am going to list my wife as 51% owner of business. I was ask to provide a lease agreement for one of the banks, but wasn't able to provide because didn't have available, so I moved on to the next bank. The interview I did over the phone was with the business loan (bank) I ended up going with. I do have the assets for emergency, and could probably come up with the full list price of tractor, but wouldn't be establishing business credit then. I know I'm taken a big risk on this venture, but I'm only 32 and I can afford to gamble a little. That doesn't mean that I'm just going to jump right in with my eye's closed. I'm going to get my all.

Also, I'm going to create an EIN with my service company, my accountant told me to create it with my (name) on it operating as (company name) and then create LLC . With LLC I am able to include business in my personal taxes under column C. No sense in paying business taxes when I am sub contracting the work out. In a way I'm a sub contracted worker for LS as well, if accepted.

I've got a occupational accident policy lined up, not workers comp. Because with workers comp I won't be covered under policy as owner. But will be along with driver under occupational accident coverage.

Sorry guy's for jumping back and forth with subjects, I keep going down boards and reading questions and coming back up and answering questions.

GMAN,how many trucks are u running right now and with who If you don't mind me asking ? Also, which company do you recommend me trying for situation I'm in, maybe easier load board, better dispatching, works in the south, and doesn't have as much of a one way street ?

And no_worries, r u also O/O ? It sounds to me like you work at the bank or spend a lot of time in banks ?

Anyways you guys both rock !! I appreciate your help,and have made changes based on your advise, I feel a bit stronger going into this, wheelturner

I am an O/O. I've got a background in economics and accounting and have dealt with banks on a few different levels. You're off to a good start. I'm not familiar with FL laws but several states won't let you cover an employee under an occupational accident policy unless they are a member of the LLC. I'm sure LS can give you the right answer if you don't know for sure; they deal with plenty of fleet owners. Also, you may want to pay an attorney for an hour of time. The biggest reason to operate as an LLC in your situation is to protect yourself from liability due to the actions of your driver. What you're planning is to operate as an LLC but choose taxation as a sole proprietor. While strictly speaking there is little difference, if it were ever tested the opposing side would be trying to pierce your corporate veil (or LLC in this case). It is much easier to show and maintain complete separation by choosing corporate taxation (s-corp preferably) within your LLC. An accountant is good for taxation but for liability issues, talk to an attorney. The last thing you want is to put your personal assets in jeopardy if your driver has a bad day.

Buddy of mine (and fellow CAD member) has had a rather meteoric rise from where your sitting to running several truck in S. FL. He's had his ups and downs but he's getting thing dialed in now. He stays pretty busy but maybe he'll chime in at some point. In any case, good luck; you're miles ahead of most at this point.

[wheelturner]

Good thing I haven't been accepted by LS yet, diesel just spiked along with gas, because of situation Egypt. Here in florida diesel is 3.58 gallon from 4.35 yesterday, and 3.15 gas from 3.05 yesterday. That would have killed me right out the gate. Now I can wait and see what's to come.:eek2:

On the flip side to my situation would you guys recommend me leasing on with either CRST malone ,or LS ?

Or, applying for my own authority and using LS broker board, and CHR broker board ? or maybe another ?

Out of the two, which would be more profitable, and or easier learning curve ?

[Heavy Duty]

Using the LS broker board you will get about the same amount of money as you would if you were leased, I know some will say different, but it ain't so.

Being leased to someone can be easier and safer and you can make money on a percentage lease if the carrier has their own customers and in not just giving you loads off broker boards that you could get without them.

Everyone has to deal with the high cost of fuel, we surived $5 fuel, empty miles hurt more.