Financing Machine Tools

strantor

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Do any of you guys finance your lathes/mills/etc?
I'm generally opposed to shackling myself with debt but it seems like it's becoming harder to do things any other way.
I've been "saving up" for a nice Bridgeport-style mill for 7 years now, and my "mill money" envelope contains a grand total of $300. It's been heavier than that before; got it up to an even $1,000 before, it seems like every time I start to get anywhere, life happens.
Unfortunately, repairing the transmission in my work truck was more important than getting the mill I wanted.
Unfortunately, repairing the rotting roof of my garage was more important than getting the mill I wanted.
Unfortunately, fixing the central HVAC was more important than getting the mill I wanted.
And so on, seemingly endlessly.
And to top that off, at the rate at which life happens, I know full well that the day after that envelope gets heavy enough and I finally buy a mill, my septic tank is going to cave in or a tornado is going to drop a tree on my car, and I won't have that little nest egg to make everything better.
So now after 7 years I find myself seriously considering taking out a loan to buy a mill, as if it might be my only option.

I guess what I'm looking for here are tips; both opinions and facts.
Is it foolish (in your opinion) to take out a loan for a hobby pursuit? Have you done it yourself?
What would be the best way to go about obtaining financing for $7,500-$10,000 for a mill?

I have a dormant LLC but I wouldn't want to sit in front of a banker and try to justify this as a business expenditure. My LLC did however give me some numbers to fill in the blanks of boltontools.net's credit app and they approved me for $4,300 - enough to get something, just not what I want. And they won't tell me what the interest rate is, so I'm leaning far away from that deal.
 
I guess my concern would be are you going to be able to repay the loan given that "life is going to keep happening"? And I don't mean to p on your parade, but 7 years and only $300 in the kitty seems like a lot keeps happening.

My quick calculation on a $10,000 @ 4% for 7 years, would mean a monthly repayment of around $130. Is this something that you figure you can handle?

I guess there is another side of the equation. If you obtain the mill would that permit you to use it to make money doing projects on the side to help offset the payments?

David
 
I guess my concern would be are you going to be able to repay the loan given that "life is going to keep happening"? And I don't mean to p on your parade, but 7 years and only $300 in the kitty seems like a lot keeps happening.

My quick calculation on a $10,000 @ 4% for 7 years, would mean a monthly repayment of around $130. Is this something that you figure you can handle?

I'm not a financial wizard by any means, but I share my income with one who is even less money-savvy than myself.
If I were to throw her under the bus, I'd have to follow; let's just say that WE can't agree on the definition of a necessity, or upon what constitutes an emergency.
It is usually a matter of fulfilling our monthly obligations and then wondering where the rest went. And that "rest" is an appreciable amount of money.
The monthly obligations are never a problem, and yeah, I think I could handle $130/mo easily.

I guess it boils down to this: I feel like the only way to make this dream a reality is to turn a monthly (wish-upon-a-star, drop in the piggy bank) into a (pay-it-or-else obligation). Because that's the only thing that seems to work for us. Otherwise we opt out of dropping money in the piggy bank when something shiny pops up on eBay and we pull all the money out at the first sign of distress. And I think I'm willing to pay a premium for the personal accountability.

If I had financed this machine 7 years ago, I would have 7 years milling experience and my machine would be paid off right now. I would have wasted $1,000 in interest, but one or two paid milling jobs per year probably would have covered that.
and I'll probably be saying the same thing 7 years in the future too.


I guess there is another side of the equation. If you obtain the mill would that permit you to use it to make money doing projects on the side to help offset the payments?

David
probably not much. I won't count on any. My line of work is mostly electrical. I have never realized an opportunity to branch off in this direction.
Any business would come from friends and family, unless I have luck with craigslist ads.
 
I know folks that can handle a regular $130/month payment better than trying to save because the $130 payment becomes part of the monthly "obligations" and monies are set aside to meet them. To some (myself included sometimes) it's more difficult to save a small pile of loose cash than it is to just plop it on the CC and make the payments. Just one person's perspective. :)
 
The interest is real expense or lost money, the mill will always be a asset - and on the calculation above the interest only amounts to $11 per month (4% seem like a dream world from this side of the planet) . Not really too much to spent on a hobby.
Technically you have to value in depreciation as well and the lost income the repayments could of made you elsewhere, but all in all the value of having the use of the mill over the 7 years more than accounts for that.

If you have a steady job and figure you can budget for the repayment I say just consider it as forced savings.
 
I think many more than we know are in the same boat. I took out a $650 loan to buy my lathe. It is paid now. I have two credit cards strictly for my shop "expenses". Being on a fixed income , I would never get anything if I need cash. The trick is to not overspend. I did that once and it was very hard to catch up. Like many, every time I save any cash ..... Something BIG takes a dump. I have always said " God lets me have what I need.... nothing more .... nothing less..... but always what I need."
 
In general I would not recommend financing a machine for hobby use (or one for commercial use for that matter). I'm a firm believer in pay-as-you-go. The one exception to this is if you have a job for the machine that will pay for it in less than 90 days. Normally when I buy a machine, one job pays for it.

Otherwise we opt out of dropping money in the piggy bank when something shiny pops up on eBay and we pull all the money out at the first sign of distress.

I think you summed that up very well. It is really a matter of priorities, how bad do you really want a new tool?

You mention Craigslist. That has been a very good resource for me. Since you have electrical skills, it opens up a lot of possibilities. I pick up $25-$30K annual from Craigslist work. I do electrical, industrial mechanical (no automotive), and machine work from Craigslist.

You also might set your target a bit lower and get a used machine rather than new. I have a shop full of good used machines, good new machines are too expensive.

Your local banker is probably not going to be interested in loaning $10K for 7 years, but places like Household Finance will do it. Another option is to get a home equity line of credit, that would cover it, less interest and normally tax deductible. Another trick is to put it on a credit card, or even a cash advance on a card. Then do a balance transfer to a zero interest card for 18 months. $560/month for 18 months pays it off at 0 interest.
 
I have been very happy buying things on Ebay with 'Paypal Credit' Worth a look. Most items are six months no interest. Also shop credit card interest. We have a Cabelas card with very low interest. Bonus is 'Cabela's bucks points' We use the card to 'auto pay' our utilities & pay the balance each month usually. Over the last few years I have bought SIX nice black powder revolvers with my cabelas bucks.
I hate paying any interest with my low retirement income. But if you play your cards right the pain can be mitigated somewhat.
Like others say, I think you can get one heck of a nice mill for a fraction of your stated goal. I've seen some beauties in the 3 grand range.
 
It took a few years but I found my Bridgeport clone on a Facebook buy/sell group for $500. It needed some work but maybe you can find something like this that would fit in your budget. And you might be surprised how much work comes your way once word gets around. I have an Amish community near me and they bring me repair work to do 2-3 times a week. It's nice to get some of your investment back.
 
I have been very happy buying things on Ebay with 'Paypal Credit' Worth a look. Most items are six months no interest.
I also looked into it. I accidentally used PayPal credit years ago when it was called eBay Bill Me Later. I had no idea I was opening a line of credit. But I it worked out for me.
I never used it again, and now I have a PayPal Credit account (I guess it rolled over). I think my limit is $500. I looked around for a link to request a higher limit and found on their FAQ page:

What is my credit line and how can I increase it?
Once you’ve been approved for an account, Comenity Capital Bank will open a PayPal Credit account with a credit line equal to the amount of your purchase or $250, whichever is greater.

If you check out with PayPal Credit and you don’t have enough available credit to cover your purchase, your account is instantly reviewed to see if you qualify for an increase. And if it can’t be done, we’ll send you an email to tell you why.

This will happen automatically during checkout, and it won’t slow you down. It also won’t affect your credit report, and there are no fees or penalties for trying!

Why am I unable to pay with PayPal Credit?

If you attempted a purchase and your credit line wasn't increased, you can try to make a purchase for a lower amount. Keeping your account in good standing and maintaining good credit may help you qualify for these real-time credit line increases . Please note that we don't accept requests to manually increase your credit line.

So I have to commit to buy something before I know if PayPal credit will have my back? How screwy is that?
 
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