# Financing Machine Tools



## strantor (Jul 12, 2016)

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.


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## David S (Jul 12, 2016)

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


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## strantor (Jul 12, 2016)

David S said:


> 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.




David S said:


> 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.


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## wrmiller (Jul 12, 2016)

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.


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## MozamPete (Jul 12, 2016)

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.


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## Mark_f (Jul 12, 2016)

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."


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## JimDawson (Jul 12, 2016)

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.



strantor said:


> 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.


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## Bradrock (Jul 12, 2016)

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.


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## mce5802 (Jul 12, 2016)

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.


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## strantor (Jul 12, 2016)

Bradrock said:


> 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.
> ...



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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## strantor (Jul 12, 2016)

mce5802 said:


> 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've been eyeing those facebook groups and Craigslist daily for years. In my area, I have never seen anything remotely close to that price. 
Around here, going price for a 30 y/o thoroughly thrashed bridgeport clone is $2,500-3,500.see for yourself
I saw a new ad pop up 2 weeks ago, what appeared to be an actually half way decent 1990's model 2hp machine pop up for $1,800. That's about 1/3 the norm, so I called to see if it was a typo. The machine was already sold and already picked up. The ad was only 6hrs old.
I've been counting on having to pay something in the $5k-$7k range for the mill and the rest is for tooling.


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## Cobra (Jul 12, 2016)

For a hobby, I would not finance toys.  If the cash flow is not there to grow a savings account, it is not likely really there for loan repayment either. 
On the other hand, financing from for a business can make good sense if there will be cash flow from the business to cover the loan.


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## TOOLMASTER (Jul 12, 2016)

paypal credit at 27% is a rip off...  



Bradrock said:


> 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.


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## strantor (Jul 12, 2016)

Cobra said:


> For a hobby, I would not finance toys.  If the cash flow is not there to grow a savings account, it is not likely really there for loan repayment either.
> On the other hand, financing from for a business can make good sense if there will be cash flow from the business to cover the loan.


I feel the same way. In my book the only thing (other than business needs/performing assets) that should be financed are houses (which technically are performing assets, assuming they appreciate). That's my opinion but I'm getting really impatient.
I know people who finance everything they own; furniture, computers, cell phones, even the dishes in their kitchen. I cannot imagine living like that and I don't want to go down that road. But dangit I want a mill!
All I had financed was my house and one of my two cars but then I recently financed a TV and a riding lawn mower, and I'm feeling a sinking feeling about that already.
Honestly I think that, as bad as I want a milling machine, having that debt looming over me is going to take all the fun out of it.

I think this is a healthy discussion for me. It's making me put my thoughts down in writing, which for some reason makes them less abstract than when they reside in my head. Bouncing them off you guys for a voice of reason is great too.
I think I'm talking myself out of financing a mill right now.
I guess I'll go back to trying on wild ideas of making a mill from scratch out concrete and other bizarre crap. Or maybe just pull my head out of my ...where it currently is... and save money like I mean it.


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## Tony Wells (Jul 12, 2016)

I have a lead on a couple of BP's, should become available within a couple of months. Prices here are much better than around the Houston area. Keep saving.......


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## David S (Jul 12, 2016)

Strantor do you really need a BP?   Is it possible that you could start with something else and do what you want to achieve?  I am not sure what other machines you may have but having interchangeable tooling can be a big asset to cut costs.

Just a thought.
David


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## strantor (Jul 12, 2016)

David S said:


> Strantor do you really need a BP?   Is it possible that you could start with something else and do what you want to achieve?  I am not sure what other machines you may have but having interchangeable tooling can be a big asset to cut costs.
> 
> Just a thought.
> David


No it doesn't need to be a BP. I'm also looking at the asian machines, especially the PM932.
My other machines are:
logan 9" lathe (fully functional)
Imperial 18" lathe (restoration project)


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## mce5802 (Jul 12, 2016)

strantor said:


> I've been eyeing those facebook groups and Craigslist daily for years. In my area, I have never seen anything remotely close to that price.
> Around here, going price for a 30 y/o thoroughly thrashed bridgeport clone is $2,500-3,500.see for yourself
> I saw a new ad pop up 2 weeks ago, what appeared to be an actually half way decent 1990's model 2hp machine pop up for $1,800. That's about 1/3 the norm, so I called to see if it was a typo. The machine was already sold and already picked up. The ad was only 6hrs old.
> I've been counting on having to pay something in the $5k-$7k range for the mill and the rest is for tooling.


 Try Spartan Machinery in Detroit...he offered me a real good deal on a Bridgeport when I was looking for parts for my comet. I was thinking he said around $700?. You'd have some shipping, but still nowhere near $3000. I got his number from HQT in Ohio. Both real good guys to deal with. Might be worth a try


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## Bob Korves (Jul 12, 2016)

I can afford to buy some really nice, classy machines -- because I didn't...


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## Chipper5783 (Jul 13, 2016)

Do NOT finance a hobby.  There is no end point.  There is no enough.  If it is so all important, figure out a way to trick yourself into saving.

Like you, I only borrowed to buy my house, never for anything else.  I've been in the game a while and my debts are in good shape.

Like BobK says, I can afford to buy almost any shop item I feel like, because I didn't cave into buying any shop item I felt like.

For my first machine, I paid cash at the dealer.  It was a nearly new lathe and I over paid.  I have since bought 5 or 6 more machines and all put together they cost me about what that first lathe cost me.  For goodness sake, you have a working lathe, a good project machine (probably many projects) and a life.  Get serious about saving $$.


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## alloy (Jul 15, 2016)

Awhile back before I found my Jet lathe I applied to Bolton Tools to get a lathe.   I was approved for $8k.    Then they sent me the contract after I called an insisted they do so.  

I would have ended up paying 85% more than the lathe cost.  Needless to say I didn't buy it.  

Get the numbers from them, don't take no for an answer. They will lead you on and then push you to buy.


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## strantor (Jul 15, 2016)

alloy said:


> Awhile back before I found my Jet lathe I applied to Bolton Tools to get a lathe.   I was approved for $8k.    Then they sent me the contract after I called an insisted they do so.
> 
> I would have ended up paying 85% more than the lathe cost.  Needless to say I didn't buy it.
> 
> Get the numbers from them, don't take no for an answer. They will lead you on and then push you to buy.



Thanks for the heads up. I did decide against Bolton, thinking that the 3rd party finance company they use did seem pretty shifty. Glad you confirmed my suspicions.

Some time after I applied (couple of days maybe), someone called me from an Arizona number, guy's name was Trace, and I can't remember the name of the company. He said I was approved and I needed to talk to Bolton to finalize my quote.
I asked how much the interest rate was, and he said it would depend on how much the actual amount financed. I asked him to run the numbers on the maximum approval amount and he claimed that he still couldn't give me an interest rate without a finalized quote from Bolton. That was a red flag. I walked away.

A few days later, another call from Arizona, this time a woman. She was following up to see if/when I was going to contact Bolton and finalize my quote. I told her I had serious reservations about not being able to get a straight answer on my interest rate before moving forward. She started talking over me before I was finished explaining why I was leery. She repeated what Trace said (multiple times), I guess trying to relieve me of my concerns by force. I felt like I was a political figure being interviewed on an opposing party's talk show. Very pushy. She's probably the person who calls you when your payments are late and threatens to impound your gear or sue you, and she probably has trouble shifting out of the REPO gear and into the SALES gear.

Anyway, it was a big turn-off followed by an even bigger turn-off, to an idea that I wasn't even strongly committed to. It didn't take much for me to walk away.


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## John Hasler (Jul 15, 2016)

If you are going to finance something like this get a personal loan from your local credit union.  If they won't approve the loan you can't afford it.


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## strantor (Jul 15, 2016)

John Hasler said:


> If you are going to finance something like this get a personal loan from your local credit union.  If they won't approve the loan you can't afford it.


Done. They called me yesterday evening to tell me I was approved for $6k signature loan at 5%APR. 
I decided against financing the mill but I'm going to let the approval sit for a bit as I might still need it. 
I am having septic system issues and I have a foreboding hunch that it's going to be next week's episode of "life happens."
If my problems are as big as I fear, then the loan will probably _just_ cover the septic work. I might even need a bit more.


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