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I am planning on purchasing my millie within 6 months or so, my question is: How do you go about financing? I'll probably have about half the cash to put towards it, but I'll still need to get the money for the rest. I've heard about the business plan method for a bank loan, but what happens if I don't ever get any customers and my business fails and I use the machine for personal use? What did you guys do for financing? Any input would be appreciated:)

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My local Compass Bank offered me a small business loan, but I got financing through my family and didn't need it. However, MB is right and the APQS folks have a local bank in Iowa that will finance 80% of the cost of the machine, so you need 20% upfront. If you go with your own bank, you will need to provide a business plan to them, you can get a sample business plan from APQS when you get their brochure packet - it's somewhere on the home page you can request it. I have my machine on order and it won't be here until mid-September. However, I am already booked with charity (practice) quilts and I'm already telling people about the machine so I can get some real paying customers scheduled into my calendar. Depending on where you live (rural, suburban, urban, etc) will really impact your customer base. Also, how many LAers are around you and how busy are they. Call your locals and ask questions. Look at websites, etc. Do as much homework as possible. I've been doing research for 3 years now and am just now comfortable ordering the machine. Good luck!

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HI Yogiquilter! The bank financing part of your machine purchase process, is easy to answer. We have a bank we work with in Iowa that treats the long arm loan like a car loan. They basically do a credit check without the need of the business plan!! :) I'm more than happy to send you the bank details if you send me your email address. This part of buying a machine isn't nearly as scary as some quilter's imagine!

Cheers,

Lisa

Lisa Langlais

Authorized APQS Rep.

Springfield, VA 22153 (Wash. DC area.)

703-440-8157, Cell 703-967-2675

APQSQuilter@aol.com

WWW.APQS.COM

Revel in each other's success, knowing full well there is enough to go around. ~~~Anonymous

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I went with a local bank. I have to be honest when I bought my 3 years ago, they didn't know in my area what a long-armer was so I presented a business plan, projected sales, and provided information on the machine and pictures off the web of the machine and what they can do..And I calculated start up cost and payments for six months, which when starting out you do not have the business at least in my area there are five long arm business, so competion and I was an unknown. I educated the bank, and they gave me a loan with no problems.. I also shopped interest and told them that up front before I met with them, that I was shopping for the best interest.. My mother worked at a bank for many years, and she said shop the interest just like a car, and let them know, that way they think another bank may take the loan..If you are a good risk and act professional, they will give you the loan.. I have a bachelors in Business Administration and I believe a business plan is a good self awareness process, but thats just me. The business plan, was not hard to write. And I will review it this year, to see where I am at and where I want my business to go.

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I agree with Diane on writing a business plan... even if you don't need it for a loan, it is a super great reference document (personally) so you can look back on it down the road to see where you started, where you've gone, and where you are going. I review mine periodically to keep me focused on my short term and long term goals (I forget those goals sometimes...lol and it's a good reminder). Another benefit for having a documented "business plan" on file is ...just in case... Mr. IRS Man decides he wants to audit you and if you've got stuff like a business plan on hand then it looks like you have intent to operate a legitimate business, and not just doing this quilty stuff on the side....you know. I try to keep that IRS guy away from me...stand very far away...thank you very much! ;)

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:D I got my financing from the bank suggested by APQS in IOWA. The guy I emailed and talked to was great (he was actually the banks vice president and loan officer). He emailed me an application the same time we chatted and I had an answer back in a couple hours!!!! I even received my Gator (Millie) before I signed the final papers which by the way cannot be overnighted because the town the bank is located in is so remote!!! The IOWA bank beat all the interest rates here in VA (even the gov't credit unions). The only extra requirement was that I had proff of insurance (which my homeowners covers) and automatic payments. It was almost tooooo easy!!!
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My husband, the accountant, suggested this for me: We got a second on the house with a fixed rate and 15 years to pay but no prepayment penalty. Payments on $25,000-enough to take classes and buy thread and tools and cushion to pay the first year's payments) are $205/month. The lower payments gave me the leeway to take time to develop skill so I wasn't trying to live down my bad first efforts (You never get a second chance to make a good first impression). Now that I'm bringing in more money I can make larger payments and pay it off faster---but $205/month and the first month's leeway took the pressure off me about worrying where my next customer was.

The loan is in our name and we get the tax deduction. My company makes the payments which are considered disbursements. We incorporated, and elected to become an S corp, which is kind of like a partnership as far as profits go, but with the limited liability of a corporation (LLC's in California require a minimum amount of taxable income--I didn't want to pay $700/year to Ahrnold whether or not I was earning any money.)

When I finally convinced my husband I wanted to do this as a job rather than get another job to finance the machine for my own use, he set me up (I feel) for success---but his view was if it didn't work out, that was okay---payments on the loan would be less than a car loan and they wouldn't have to come out of our income until the cushion was depleted---which was after the current car loan was paid off. He said here in Silicon Valley if an entrepreneur hasn't faced failure he just doesn't have a lot of experience yet. (He also said I could get a part time job to make the payments if I couldn't earn it quilting! ;) )

Looking back, it was the smartest thing I ever did with the business. I didn't have customers lining up to hire me in the first 9 months and trying to pay off the machine in the first year would have given me palpitations. But now I think I've cultivated a reputation locally as a very skilled free motion quilter.

Marty Provencher

www.heartsdelightquiltingcompany.com

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I wrote up a business plan--just to convince my husband that I was serious about doing this--he still just thinks that it might be an extension of my quilting obsession and still be a moneypit to him ( I am a stay at home mom)--but he consented anyway and I got a loan from our farm credit services--where we have a loan for our land--funny story the young man who gave me the loan even knew what quilting was--he said that his mom does a little of "that stuff". My payments are quarterly and the first one in August--good thing I do work one day a week in our local Christian school--because I can always use that to make a payment---or I told him that if it doesn't work--I will get a job in one of the many machine factories in our local town.

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  • 2 weeks later...
  • 3 weeks later...

I purchased my machine in a slightly different manner. I work full-time and wanted to get a running start on after retirement plans. I wanted to be skilled enough to have a part time business after retirement in a few years. I did not want the pressure of having to make money to pay for the machine now while I was learning. I'm 60 yrs. old and withdrew the cash from my 401K that I have at work. I figure that my Millenium is a good investment in my retirement. My sons who work at an investment company weren't pleased but it is MY MONEY!

I love having my machine available to learn on without the pressure of payments. As it has turned out, life happened and all my spare time is with my husband who is having both knees replaced. I want time to work on my machine! ! !

Linda

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