Financing for Pet Groomers
What do pet groomers finance most often? The most common financing is for pet grooming business plans and mobile grooming vehicles. Financing is also available for pet grooming equipment that may be part of a business plan build out, or independent purchases of new equipment such as tubs, tables, dryers, clipper vacuum systems, central vacuum systems and caging. We suggest you review our Grooming Products Showcase and know that financing may be available to acquire your business needs for equipment and vehicles.
The following information is provided courtesy of Tim Cetto of Full Circle Finance serving the grooming community.
Recently I was asked by the staff of Pet groomer.com to put together a blog to answer questions that pertain to owning and operating a small business from a financial perspective. I wouldn’t even begin to be able to tell you how to groom a dog but I can hopefully help you manage your business finances when the time is right to expand or downsize. One of my favorite commercials was a US Bank commercial that showed a daredevil skiing off a cliff or jumping out of an airplane and the caption read (But I bet he doesn’t own a small business). There is a lot of truth to that!
I have been loaning money to small businesses throughout the United States for over 30 years. During my career, I have had the opportunity to watch small businesses grow to large companies and get sold for huge profits. I have also witnessed those that weren’t that lucky and had to close their doors. I love what I do. I continue to enjoy being a part of what I think makes our country so amazing (the small business owners).
So, with that said, let’s answer a few common questions I get from clients.
Question one: What can I do to get my credit score back up?
For most small business owners credit scores are a mystery but they have to be taken seriously. Good or bad credit scores can mean the difference of either growing your company or costing your company thousands of dollars in higher interest rates. We don’t need to get into the weeds with that but as a general rule of thumb, credit scores below 600 would be considered subprime to most lenders. Credit scores are based on mathematical algorithms that take into consideration the length of time on the credit file, pay history, home ownership, your high credit, revolving and installment debt etc.
Here is my tip. Pay your bills on time every time!
Another great tip is to keep your revolving credit utilization down and never borrow more than 50% of your combined credit card limits. If you have 3 credit cards each with a $5000.00 high credit limit never let any one card get over $2500.00 and never let the 3 cards get over $7500.00 in combined balances. If you are in a situation where you have maxed out one of the credit cards it is better to use another one to pay the maxed out card down to below 50% as long as both cards stay below that magic line.
Question two: Should I pay cash or take out a business loan for this new equipment?
You need to use every available source of capital you can find when you a running a small business. Of course, cash is the cheapest cost of funds you can find. Equipment depreciates, therefore it often makes more sense to budget the right monthly payment for your equipment purchases. With that being said, I have seen small business fail because they have spent all their cash and when it came time to make payroll well you get the picture. The best practice is to maintain a strong cash position in your business. A cash position strong enough that you could keep the lights on for two or three months even if you didn’t make a dime. Finance assets that make you more productive like your phones, computers, vehicles etc. Those type of assets deprecate in value but you can’t do business without them. When banks look at a business balance sheet one of the first line items is cash on hand. Cash is king to banks so try to keep some around.
That’s it for now. I am looking forward to answering question you may have.
Tim Cetto, CEO, Full Circle finance, Inc