Due to the recent slow down I have been contacted by several contractors regarding payments, late payments and their options..
I thought I would share with you some of your options..
Hopefully you didn’t select the lowest interest rate.. If you did then the deal went thru Ingersol Rand who works with a bank.. Ingersol Rand is no differant than any other manufacture. In fact the bank they used is also used by most other manufactures.
That bank doesn’t care about much except getting their payment on time. While you can call them from the contacts I’ve had it is a extremely expensive deal to modify or change things.. It also happens rarely… I’ve gone to bat for some well deserving contractors and felt like I was talking to a brick wall..
On the other hand if you selected a local bank or financed it thru the dealership, things are usually much easier to work with.. Yes, you paid a higher interest rate but in the long run I supect it was well worth the differance..
Just how much help you get depends on several factors. From here on out I will speak about my company’s polices. Realize though that few are the same..
First, much depends on you.. If you call before the due date heck we usually work it out and your credit score doesn’t even get dinged.. If you call shortly after it’s due but before we contact you, again we can often keep from dinging your credit score.
If we have to contact you your credit score is going to take a hit and we will be really a lot less flexible.
The absolute worst is if you fail to answer or contact us.
Now some payment options we normally accept..
A single late payment
a delayed payment,
a partial payment,
a skipped payment* added to the back end of the loan at original terms
Interest only payment.
a refinance. (can under certain circumstances dramatically reduce payments)
a workout. Where you agree to work closely with us so that we know as much about your circumstances as you do. The rarest option since we wind up spending sooo much time on an unproductive account..
In general if the deal makes business sense we will try it, we’re not a charity but we do completely understand the nature of the business.
Renting has the fewest options, usually we will want you to return it and at that point we will start from scratch on any rent to own deals. Rare exceptions do happen but you need to understand your best options occur with leases and other contracts.
If your intention is ownership, convert before you will be late. It’s harder to approve a deal that starts out in the hole.
I will give one warning though.
Don’t try to hide equipment if you are late. We simply report it as stolen, contact a former sheriff who has all the contacts and often the person will spend the weekend in jail..
Few Builders will accept a contractor who causes a lien to be filled on a building,,,
Clearing up an unexpected lien can delay and sometimes kill a sale.. Have a few buildings that get liens filled due to you and don’t be surprised if your bid isn’t accepted.
I’m constantly amaised at the ways we make it work for our contractors.. It’s good business for us, it makes loyal customers and this business is very much all about referals.
Even if you are hopelessly late and don’t see much on the horizon unless you want to quit and go into new field contact us and we’ll really try to make it work out.
"Few Builders will accept a contractor who causes a lien to be filled on a building,,,"
State laws vary, but I think that most of them limit the lien to materials or labor INSTALLED on the building.
So unless the forklift is going to be built into the building for use as an elevator I don't think that you can put a lien on the property for that.
You are correct in that states vary.. here in Minnesota we need to file a prelien on any building that will use our equipment It's time consuming and we only do it on marginal accounts. Many builders/owners simply don't want any chance of a lien filed on a building so once they see us do a prelien they really moniter the contractor closely.
Liens can be filed simply for the labor used to frame a building. Again a prelien needs to be filed or the process requires a lawyer and that can easy cost more than the money involved..
that reminds me. Trucking company here, they haul strictly rock and gravel. The IRS came snooping a few years ago and wanted to raise a stink for the guy. I dont know if he really did anything or not. They couldn't for anything find his trucks. He drove them deep into the mine and parked them at night. One of those odd little stories. I think the IRS were the only people who didnt know where the rigs were.
"Sometimes when I consider what tremendous consequences come from little things, I am tempted to think -- there are no little things" - Bruce Barton
I guess just because I'm curious like Goerge the little monkey.
Are you guys actually seeing a significant slowdown in work right now?
All the signs are pointing to it here but everyone is still going to work every day and the checks are clearing.
It varies a lot, commercial which was really slow has suddenly picked up while residential which two years ago had 5500 new building permits in the 7 county area went to 3300 last year and 1200 this year for the month of June. I spent most of July looking for new homes and found darn few new basements in place (my standard for future business)
Guys who call me I'm turning them onto apartments and townhouse projects, money for them per sq. ft. is real tight but I tell my guys plan on losing money the first floor, breaking even on the second floor and on the third you can turn a profit..
Repetition breeds speed, so if you can't learn to speed up with familiarity you will be in over your head on these projects.. Guys who have had the fun of doing custum work really tend to have trouble on apartments, not because of any difficulty but because of how boring they are.. You need to learn to channel your energy into learning productivity rather than creativity..
Since the recent demand for commercial I have had a great increase in demand for our big 10000 pound 56 foot forklift which is what it takes to work more than two stories effectively. While you might be able to use a 42 foor forklift to set stuff up to the third floor, if you can get right up to the building, oftimes their are restrictions or other problems which prevents effective working.
One other point,,
If you are late or expect to be late please don't hesitate to call. If you do call you will never get a sermon or lecture from us.. Heck we know that contractors go thru rough spells, it's part of doing business.. Not every customer pays on time and Guys order work performed and their not able to pay you on time so it is reasonable to understand that you are between a rock and a hard spot. The last thing you need at this point some sermon..
Expect understanding and reason.. Make a businesslike proposal and explain how you figure to work out of your position and we'll listen carefully and do our level best to make it happen for you.. OR just ask for our help. We'll offer suggestions and probe gently in an attempt to find a workable solution... The fact that you are calling us before is usually all the proof we need to do our level best to find a solution..
You need to realize that we have a lot more flexibility if you've got a good record of making payments or you've had the equipment for several years.. Unlike trucks/ cars/ and Skid steers (bobcats) Forklifts do not depreciate tremendously every year if used by carpenters A carpenter is hard pressed to use the equipment for over 200 hours per year Since the effective economic life of a forklift is 10,000 hours one that is 5 years old has another 15 to 20 years of life left on it..
Because of that we are able to do a refinace on equipment that maybe three years into it and have the forklift payments be cut in half or even less.. I SAW ONE CASE WHERE THE PAYMENTS WENT FROM $1700 A MONTH TO $600 A MONTH.
Do not assume all forklifts have been used by a carpenter.. The biggest market for forklifts is Masons who easily can use a forklift over 2500 hours a year Three years old with 7500 hours on it, they knock off the concrete, repaint it, put new decals on it, a new seat and tires and finally a new hour meter. It looks new!
Since hour meters aren't a legal requirement like cars and trucks odometer it's not illegal to replace them and let the buyer beware.
That three year old forklift is mostly worn out. Heck the grease fittings were coated with concrete so it was impossible to grease it. the reason it's on the market is the owners know that their older equipment needs a lot more expensive maintinace than new ones.. While a carpenter is forced to use his equipment in a far more ginger manner.
You won't find that level of discrimination at a rental house or a less than driscriminating dealer.