Hi Ho Hi Ho Its Off to the Bank I go

[Meadows Miller]

Gday

Well got all my stuff together late last week For a complete new turn key Kara sawmill and new cummings power plant Loader and Working capital a grand total of $220 smackas  ;) as they will only finance new equipment  :

dont worry fellas  I still have plans to use the old girl as the main breakdown unit at a later date  ;)  ;D

and i got a great deal on the kara as its a cancelled order from Russia for 3 machines and  a saving of 10% for a start of the current list price  ;) ;D 8) from the local importer that ive delt with for around 10 years training opperators and the like He's also waved the 16% dep and will just take full pament for the mill when it gets here that will save me the repayments on the main part of the loan untill it gets here  ; ;D 8) 8) 8)

Ive put in my Business plan all 28 pages of it  :D and other supporting documents plus 4 letters of intent totaling $2.6 million worth of t/o pa just to show there is still plenty of demand .

To two banks so far and  and one other bank which im meeting with on thursday morning The responce has been good sofar and they have been impressed with how well set out the plan is even on consevitive figures and an average of about 3400 bft per day production for two men  ;)

So the waiting game starts now  :D they reckon itll only take 4 to 5 days to get approval once their been counters have done their risk asesment  : ;) :D :D

So wish Me luck  ;) ;D hopefully its good news by the end of the week ;)


You can check out the Kara at www.karasaw.com

Reguards Chris

[Tom]

I don't understand how that carriage works but it sure looks nifty.  Is it an end-dogger?

[ARKANSAWYER]

  Not sure about the banks down under but here it would be

  FEE  FII FOO FUM  I smell the blood of an Ausy man.  Then they will eat you and spit you out like a cup of luke warm coffee.



                        Best of luck!

[Meadows Miller]

Gday

Tom she's an end dogger The dog pops up out near the end of the log aand slides up into the end of the log hyd'ly they are a pretty slick mill on logs from about 8" to 24" dia and will cut upto about 26' to 28' long w/o much trouble depending on which model you get  ;) Ive got about 8000 + hours on these types of mills alone  ;D I usually average 3000 bft on my own and about 4500 plus with a stacker working with me Mate   ;D 8) 8)

There is also a tax break of 50% on the purchase of new business equipment so that will give me about $90k that i wont have to pay tax on next year  ;) ;D

Arky I like your style Mate  ;) as I read your posts all the time  and have read the one from afew years ago when you where in the same boat  ;) I hate dealing with banks and have avoided it for this long  ;) it needs to be done to consladate  my cashflow and increase production . As with how things are going Downunder we are holding up alot better than the rest of the world Atm  ;) ;D Every one seems to be ticking over pretty consitantly  we hit a bit of a brick wall late last year but our economy is a little diferent than the USA as we are still a Manufacturing based country with a 75%Man V a 25% retail sector where over there it 75% Retail V 25% Manufactuing economy so it hurts alot more when people stop buying the Cr@p they dont realy need in the first place Mate


Reguards Chris

[woodmills1]

go for it, I just borrowed to consolodate my exisiting loans and upgrade.  I am doing better than 50% over what was my previous production and my loan payments are lower because the new loan is at a lower percent than the 3 old loans.  Here in US we can use something called 179 expense on taxes for new equipment.  I get to write off entire price of upgraded equipment in the first year of purchase instead of spreading it out over the 3 or 5 year life as depreciation.  I have always tried to put off taxes to future years if possible, by reinvesting in the business, the bonus is newer equipment and more money left in hand at the end of the year.  How can you argue with a tax plan that allows an up front write off for equipment that is on time payments.

[Banjo picker]

Good to hear from you Chris.  I was afraid that winter weather down there had you froze up somewhere.   :D  Tim

[Cedarman]

Congrats Chris on your expanding venture.  Don't do like me and let your mill own you, make sure you own the mill.  The bad thing about writing off equipment is that when we sell it, the income is taxed at regular income,  it is a killer.
I went to refiance my mill at a lower rate and had 6 months of trouble.  The bank was finally bought out after messing up in the housing bust.  The boss of the new guy doing my paperwork told him that he knew me well and bought a lot off of me and to give me what I wanted.  That's the way old banking used to be.  Never dreamed it worked in these days.  I think one needs to curry favor with the big boys at the bank to keep things rolling.  But I ain't taking up golf no matter what.

[Meadows Miller]

Gday

Tim good to hear from you too Mate  ;) ;D Things have been flat out i just need more day light hours to get it done in 10 1/5 just aint enough mate   ;) :D :D I cant wait for summer to come back and go to 12 hrs pluss  it aint to cold over our way atm today started a -2 deg C about 29 of in your language  and got up to 68 of  just after lunchtime and we havent been getting too much rain probobly about 3 days out of the last 12 Mate  ;) ;D

Woodmills and Cadarman I should have realy done all this Years ago when i was about 20 but was Bull headed about doing things of my own bat  ;) But my main issue is and has been that i dont have the production capacity as most of my customers ar ordering around the 40000 bft a month plus ( i even have one that wants 400000 bft but a month but like iive had to explane to the bank managers that would require an investment of about 600 000 plus to do just that volume  ;) :D :D ;D ) so ive been passing up on alot of work and just trying to focus on one size for a certan costomer  : : but the funny thing is that when they ask me if i have any other things like how many credit cards or car loans  i have i say ive only ever had one C card and i snapped that one in half after a year and that ive never borrowed money for a car in my life

I was offerd one of these mills on terms when i was 21 from a sawmiller up in QLD  but came home to have another crack with the ex missus  I dont know what the hell i was thinkn sometimes : : :

Reguards Chris

[Bibbyman]

  Not sure about the banks down under but here it would be

  FEE  FII FOO FUM  I smell the blood of an Ausy man.  Then they will eat you and spit you out like a cup of luke warm coffee.



                        Best of luck!

Sounds like you left a bitter taste in a lot of banker's mouths!  

[campy]

DONT BORROW MONEY IT ENDS IN SLAVERY.

[Cedarman]

Borrowing money to expand a business is using money as a tool just as you are using the mill as a tool to make money.
Borrowing money to take a vacation is the way to bankruptcy.

These are 2 different reasons completely to borrow money.  One works, one destroys.

[Banjo picker]

I think one needs to curry favor with the big boys at the bank to keep things rolling.  But I ain't taking up golf no matter what.

I have lost several jobs down through the years because I didn't play golf. :(  Once I was told it was 99.9 % sure we had the job on Friday evening and then Monday morning we got bad news.  Golf struck again.  Tim

[Meadows Miller]

Gday

Dont worry about the ones you miss through not playing golf i dont Tim  ;) ;) ;D  :D :D :D
I just passed up on a $15 grand job last week building 1 ton Pine Spud bins at $1.00 US a bft and had another phone call this week from another Manager from a Pre Cast yard where a mate works who put him onto me    wanting $12 to $15 grands worth of H/duty 3'x3' pine concrete pallets @ $30 ea every 2 to 3 months plus about another 12000 bft of 3x3 to 6x6 dunnage at .71 cents US a bft every month 

The works out there you just have to be able to do it in a productive manner  ;)

Cedarman I agree with you fully i think the banks have been too occupied with snatching wage earners pay checks for too long and look for what they think is secure money(It aint So secure Now is it  ;) ) just because they have money coming in each week dosent mean they can live of it when they are in dept to the hilt  : :
The thing is they make it So bloody hard for for small business to get finance  : : But i think they dont realy understand where Pay checks come from sometimes  ;)

Campy Im already a Slave Mate  ;)  :D :D A Slave to Keeping older gear running A Slave to working long hours to try and get a decent production figure or get anything done at all some days  :( : And a slave to when things do go wrong  taking a hell of alot longer to bounce back When you have one thing go wgong out of two its a lot worse than 1 in 10 or more jobs  you might have on the go in the one month

If i dont get the loan im giving serious thought to adding contract onsite milling @$66 per hour on other peoples logs or taking one of the 4 sawyers jobs ive been offerd sincre the start of the year  they range from $55k to $80k pa plus the down side to that  is that most of them are interstate the furtherst away being in SW Western Australia managing a harwood  mill processing about 25 million bft pa But like ive said before Ive had about enough of looking after over peoples problems  ;)    : :

Im of to the last bank In the morning then its just the wait while the been counters double check my figures then i should start hearing back from the other banks in the before the end of the week

Reguards Chris

[Cedarman]

5 years ago when we started grinding cedars in Ok, we accidently got hold of 160 acres of state land that was leased by a banker who raised cattle on the side. State land has to be cleared of cedar every so often by the lessee or they lose the lease.  The banker had it cut and ready to push up and burn when we came along.  We did the job and made a lot of mulch.  It just so happened he was the VP of the bank that Aaron decided to visit to get a credit line.  It did not take long to get it done.  Shame is the banker has moved on and its back to struggling with people that don't have a clue.

I think the moral of this story is to make friends with bankers before you need them.

[Ironwood]

179 "write downs" can be utilized on ALL equipment purchased new or otherwise. You can even opt to randomly do it to whatever remaining "book" value they have (that is to say, remaining depriciable value). ;)

      Ironwood

[woodmills1]

to follow up on what ironwood wrote above....

179 expensing is a part of the business deductions in the federal tax system, and as far as I am concerened it is a very important part of any small business plan

when money is spent by a business on new equipment,(new to the business but may be new or used stuff) there are two ways to use the cost as a deduction against income.

first is using depreciaton
each type of equipment has a class life, that is the number of years  that the IRS considers as the usable life of the stuff.  basically the net cost of the machine is devided by the number of years and that dollar figure is then written off against income for each of the years. (it is a little more involved but this is the general principle)

second is called 179 expensing
this allows the entire net cost of the equipment to be written off against income in the first year of purchase.  the small business limit is up to $250,000


there are reasons for using both forms of write offs as depreciation allows a write off in the future but only allows partial amounts  and 179 allows large write offs up front but nothing in the future

I use both so as to bring down my tax payment in the first year and reserve a little for the future

179 may be used even if the equipment was bought on loaned money

if you saw part time and have other income a "business loss" created by expensing may be used as a write off against your other income, as long as the business shows a profit in I think 3 out of 5 years.

[just_sawing]

I got inpatient and decided to go to the bank last week and borrow 10 K
I figured that our farm and everything else is paid for I would put it as farm loan.
I am not rich but all bills are paind I have 300k in paid equipment. 150 K in property and they denied me because I retired from public work and do not have a five years of running the business as I am now. Even though I opened the books and showed that this was probably going to be a 3 month loan.
Bottom line I am pulling my business from that bank and going to a locally owned bank where I will put a 20 K deposit. in ti and sit down with the Local President and work up a relationship.

[Cedarman]

Now ain't it obvious that banks will only loan you money if 1) you don't need it or 2) you look like you can't pay it back.

[Banjo picker]

I would bet they would have made you dizzy making that loan if you would have put up that 150 k of property for that 10 k loan.   ;D  Our local bank is no longer a local bank.  In the past i would go to an auction and buy something call the bank and they would say " Come it the first of next week and we will work it out.  Can't do that now.  Tim   8)

[sparky]

Chris,

I had meant to get back to you quite some time back, but had a bunch of issues to deal with. I enjoyed visiting with you and seeing your operation. Thanks again for all of your hospitality! It was quite sobering to travel thru the area that was devastated by the forest fires earlier this year.

Have you come to terms with a banker as yet? A good banker is hard to find. I have only managed to work with a couple of them in my lifetime. I am anxious to hear about the progress on your loan application. Have you acquired more inventory of fire damaged logs?

Will

[Handy Andy]

  Really used to get tired of bankers.  Now I refuse to use them.  One time had a banker who made me 2 separate house loans, then got confused about how much I had borrowed on each one. So when I sold the first house, he took all the money.  Then had to wait on any money for myself till I sold the 2nd one. Lucky I farm, and know how to get along without money.

[Meadows Miller]

Gday

Will Hows Things Mate  ;D Your wellcome anytime you want to go walkabout you will have a place to stay  ;) ;D I realy enjoyed your visit  Ive ben meaning to make a post but dad changed the format for the pics so im still trying to get my head around it but ill do it soon  ;)
ive been flatout with work sawing orders cutting  pallet boards is slow going with a lucas  ;) :D and ive also started a 14'x26 timberframe with loft to sell also  ;) ;D 8)

With the bank's one said no  but i was expecting it from that one ;) The local Bendigo bank where i do my banking just started on processing things on thursday so i should know more mid week but i get along well with the manager well as we have been talking about this for a couple of years now and we have a pow wow every 6 to 8 months about things  ;D but i wanted to get a couple of things sorted out first He is also good mates with Garry my falling contractor and brought it up at the meeting on monday and said garry talks alot and verry highly of you and that hes only going to upgrade his  gear if i get appoval  ;) So we'll see how things go at head office but im not holding my breath tho mate  ;) :D

With Logs Ive got more than you could shake a stick at  ;) :D Theres about 800000 bft on the ground at that plantation we stoped at  that day just rough sawlog as they where only cutiing export logs and leaving the pulp and lowgrade stuff on the ground  one problem tho its all smaller stuff ;) :D Like i said to les its no point dragging the stuff home if i cant process it quick enough  ;) ive got acess to enough Live standing blocks of pine to keep me going for 10 to 15 years at about 2 million bft pa without having to even have to go looking for other supplys  ;) ;D 8) 8) I also have the Cypress organised for november so there' another  $66 k Wholesale or $100+ retail for the year just wish that had arrived in feb like it was supose to things would be a hell of alot easer atm : But these things happen tho its just life  ;) :D :D

Andy I think most small business are like farming Like my uncles say theres no money in sawmilling but they just get the reply tat theres no money in anything if your not doing it properly  ;) :D :D pluss im sick of just scraping by  :

Reguards Chris