Posted by jackinok on July 27, 2012 at 14:59:40 from (68.235.135.5):
In Reply to: OT - I hate banks... posted by Lyndon - AB on July 27, 2012 at 12:06:11:
To help you understand a BANK exists first and foremost to SECURE your and the other depositors money. It does this by (a) buying by law us treasury bonds (b) making SECURE loans and (c) having a secure vault to hold valuables. Thats its primary function and this is why its often harder to get loans there. Its only allowed by bank examiners to have on loan at any time a small portion of the depositors money. Its not unheard of for a bank to tell you one day they cant help you ,and the next to call you and say come get your money,simply because folks paid off loans or they got a new depositor with lots of money. When they have to repo something it has to by law be reported as a loss(or held on the books in the negative side)Simply because they have taken the depositors money and basicaly gambled it away.
a CREDIT UNION is a horse of another color. Its there expressly TO loan money or extend credit. It simply takes the depositors(union members) money and guarantees credit to other union members. Since it exists mainly to extend credit, if someone defaults on a loan , anything (such as your used truck) thats repoed is allowed by law to remain on their books as an asset until its sold. And since they are not bound or held to such strict rules as a bank , that has to show its books every thirty days, its losses can be averaged out over a longer period of time and somewhat negated by other good loans. This is why quite simply its usually easier to get a loan at a credit union. They are simply allowed by laws to take greater risks.
all that being said ,i do (sort of ) hold to the banks way of thinking. Its my belief that if your starting out in a buisness such as your contemplating your better off with the best equipment possible even if your initial profits would be less. If you HAD to scrimp on equipment due to finances it should be on something less critical than a truck that if it failed would shut down your whole operation. But thats me,and my opinion only of course. I wish you luck and i applaud your willingness to go for it. I personally would try a credit union ,they are in a much better position to help you (especialy these days),And in a better position to work with you while your starting up.
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