Equipment loans and finance agreements are debt; leases are contract obligations. Buying a business can be a term-loan use. Tax treatment belongs to a tax preparer. Any credit check comes from the funding partner, as part of its own review.
Is Equipment Financing Debt? A Bristol County, MA Machine Shop's Coordinate Measuring Machine
An equipment loan or an equipment finance agreement is debt: the business owes the payments and the partner may hold a security interest in the machine. A lease is a contract to pay for use of the machine; the business owes the lease payments, but the leasing company owns the equipment.
- Loan or finance agreement on a coordinate measuring machine: a debt the shop owes until the last payment
- Lease on the same machine: an obligation to pay for the term, with ownership staying with the lessor
- How either one is recorded on the shop's books: a question for its accountant
When a later request comes in, a partner may ask about both kinds, so current loan and lease statements belong in the document pile. Every funding type and how it is paid is on the business loans page.
Can I Get a Loan to Buy a Business? What a Partner May Want From the Seller of a Fall River, MA Plumbing Contractor
Yes, buying an existing business can be a term-loan use: the equipment, the customer list, the stock and some working capital. Any building or land in the sale counts as real estate and falls outside this site. A startup with no operating history is outside it too.
For a buyer taking over a plumbing contractor, a partner may ask to see the seller's side of the business as well as the buyer's:
- Whatever paper fixes the price, such as a signed purchase agreement
- The seller's business tax returns and recent statements
- A list of the vans, tools and stock included in the sale
- How long the buyer has worked in plumbing, and how much of their own cash goes in
The term loans page works through a purchase price and a down payment with invented figures.
Is a Line of Credit Tax Deductible? What to Bring a Tax Preparer About a Bristol County, MA Machine Shop's Tooling Draws
Whether and how line-of-credit interest is deductible is a question for the business's tax preparer, not for this site. What the preparer needs is a clean record of what the line paid for and what it cost.
Illustration only, invented figures: a machine shop draws on its line for cutting tools and inserts. Its first three monthly statements show interest of $142.18, $118.40 and $96.75, $357.33 in all (our arithmetic). Keeping those statements, plus the invoices for what each draw bought, gives the preparer what it needs.
Using the line only for business costs keeps that record simple.
How Long Is a Line of Credit Good For? Draw Periods, Renewals and a Fall River, MA Payroll Before a Big Order Ships
The agreement sets it. A line may have a draw period, during which the business can draw and pay down, followed by a renewal review. At renewal a partner may keep the line, change the limit or close it.
Illustration only, invented figures: a shop paying $12,300 of wages every two weeks ships a big order and sees the customer's money 40 days later. That wait holds 2 or 3 paydays, so the line has to carry $24,600 to $36,900 of wages if the shop draws for each one. A line that renews before the order ships keeps that room available; the renewal date is worth checking against the order schedule.
Draw-by-draw examples, including a payroll case, are on the credit line page.
Does Applying for a Business Loan Affect a Credit Score? Where a Credit Check Fits in a Bristol County, MA Request
A request form sent to Meadowside Credit is not a credit application. A funding partner may check credit during its own review, and that check can show up on the owner's or the business's credit file.
- Sending the form: a request for review, not a credit application
- During the partner's review: a credit check may happen
- At any point before agreeing, the owner can ask which type of credit check the partner uses
For a request to cover a repair bill, the owner can ask that question on the first call, before any check. The phone number for that call and the office address are on the contact page. Each step of a request is laid out on the how it works page.
By Meadowside Credit ยท Updated
