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Karl

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Yes. But the banks (along with anybody else extending you credit) are in a privileged position. If you need credit from them, they have you over a barrel. I've seen many people give PG's to banks, thinking their business model wouldn't fail, only for them to be facing eviction 12months after their business went tit's up.

Just a fact of business. If you want them to give you credit, they can make the PG's a condition. Don't like their terms - go elsewhere is the normal attitude.
 

Sawyer

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Digit":8qkzjanv said:
There seems to be a misconception that Chippendate et al would have foresworn modern technology.
Roy.
Chippendale in his day was truly 'cutting edge' and I'm sure he'd have used every bit of technology going. Otherwise, he would have probably have decried mahogany?
 

Jacob

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Sawyer":14sopdya said:
Digit":14sopdya said:
There seems to be a misconception that Chippendate et al would have foresworn modern technology.
Roy.
Chippendale in his day was truly 'cutting edge' and I'm sure he'd have used every bit of technology going. Otherwise, he would have probably have decried mahogany?
Yes no doubt. His timber could have been "milled" by water power - the saw pit wasn't the only way even then.
The misconception probably comes about because if you want to replicate or invisibly repair a hand-made item you may have to resort to hand tools, in the later stages at least. The design and the technology are difficult to separate.
 

Digit

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I'm not sure that Chippendale ever actually ever made any 'Chippendale' furniture, he was a business man, in it to make money, so like most business men he would have used whatever means produced the quickest result.

Roy.
 

paultnl

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Karl":2wgfuh5m said:
Yes. But the banks (along with anybody else extending you credit) are in a privileged position. If you need credit from them, they have you over a barrel. I've seen many people give PG's to banks, thinking their business model wouldn't fail, only for them to be facing eviction 12months after their business went tit's up.

Just a fact of business. If you want them to give you credit, they can make the PG's a condition. Don't like their terms - go elsewhere is the normal attitude.

The banks are happy to accept the privaliges of company status for themselves (government bailouts etc.) but they do not want to allow SME's the same protection.

The last time I discussed a business loan with my bank manager we had long and involved discusions about the business plan and potential outcomes with no mention of a PG but a usurious interest rate. When the paperwork arrived there was a PG buried deep within the small print and he was suprised when I called him a disingenrious B*****d and declined his services.

All business has risks and the banks should accept them in the same way as the rest of us. I cannot demand PG's from my customers so why should they?
 

Karl

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Paul - i'm not saying it's right, nor trying to defend their position. Just stating the way it is.
 

paultnl

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Karl":1njyhsgk said:
Paul - i'm not saying it's right, nor trying to defend their position. Just stating the way it is.

Karl - I didn't think you were trying to defend the banks I was just taking the opportunity for a rant.
 

Max Power

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"At end of the day Bob is a LTD Co and could walk away from the debts if it all went Pete Tong."

Not with personal guarantees he couldnt Karl
 

Karl

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That was my point Alan. If he didn't give the PG, he could walk away from the debt, hence the bank looking for a PG.
 

doctor Bob

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I'm afraid this is just the way it is at present, we have good accounts, good history, good order book, we have never needed a loan or overdraft in 8 years of trading, our account is normally around the £40 -50,000 mark, yet the banks are still very wary to loan.

To be honest there is no point in taking a loan with a PG we are better off to lend the company the money ourselves.
 

Jacob

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Sod the banks then. They are due for a big shakeout anyway so best avoided.
I have a fantasy about going back to basics and dropping in to your local boozer and seeing if you could get local finance. They aren't getting much from normal investments after all, and they are just pissing it against the wall!
 

beech1948

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Hi,
Powertools beat me to it.

If you are going to provide the cash to the company then you would be free to charge whatever rate of interest you deem appropriate, you retain ownership of the machine, the company pays for all maintenance and repairs, you can claim a write down of the machines cost against your tax bill. Don't forget that you will need to make inspection visits at whatever charge you choose and also claim all expenses involved.

Its not a goldmine but it could become a minor stream of money back to you.

If you wanted to get inventive then you could charge by the hour of use, or per piece.

Congrats on your response to the bank re a personal guarantee. I went through the same issue about 2 yrs ago. Been with the same bank for business accounts for 31 yrs, always in the black, no defaults etc etc but they still wanted a PG. I did what you are considering to fund a new machine. I play golf with the local bank manager occasionally and take great delight in reminding him of the high interest rates I charge my own company.

Who ever said being in business was easy.

Al
 

Losos

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Eric The Viking":1v7x0rx4 said:
I'd see it as value versus volume: if the new kit lets you do clever stuff faster and/or better, so as to drive down the variable costs of your existing business/designs, that's good.
If there's an implication that you have to do anything new or ramp-up volume to amortize it, I wouldn't go there.
I'd also go over the depreciation rates, etc. and carefully consider the opportunity costs -- what else you might do with that much money, which would drop favourably to the bottom line. For example, would better premises, either location or facilities or both, mean you could do the same work only faster (room to move)? How does rent compare to a commercial mortgage?
Interest rates will go up from here (they have to), so how affordable would the kit be at, say, 8% compounded? If it wouldn't be affordable, don't do it. Also consider: 1. you may get a much better deal later when sales are harder for the machinery distributors, or secondhand, 2. in this climate, don't buy anything that uses breakable 'hens-teeth' parts: if the manufacturer dies, you might be left with a white elephant that you're still paying for.
In one way it's a nice problem to have, in another it's tough. One thing I was taught in business school though was that a carefully made decision NOT to do something is still valuable. Chances are that competitors who haven't analysed will jump in and catch a cold in consequence. On the other hand, if the numbers do stack up in a higher-interest-rate world, be bold.
Bet that didn't help much! ;-)
E.

Actually Eric there's a heck of a lot of sense in that post, I also agree that sometimes a decison to do nothing is still a decison provided all the pros and cons have been carefully considered. You are right interest rates will have to go up but personally I don't expect that to happen anytime soon, in fact I am saying it will be the end of 2013 and more likely in 2014
The best advice I can give is that if the purchase of new equipment can be delayed for a year or two then pick an interest rate of choice and start paying that into a seperate bank savings account, then when the decision really has to be made you will (a) know if the repayments are manageable ('cos you'll have been paying them for a year or two) and (b) will have to borrow less ('cos you'll have some money in a seperate account to put down)
 

Allylearm

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I have no answer for your speculation question or not to speculate this is down to you and your decision alone. I always liked to speculate to accumalate.

But I do know about CNC Routers so bear with me to find out your knowledge. I have worked and purchased Routers from my first Wadkin Plunger to upgrade to power fed foot, Wadkin CNC a real pain, then we got into CMS Griggio twin table, Reichenbacher Eagle and lately a Homag.

Going with the price you quote and country of origin you seem to be considering a SCM. I take it is a 8x4, how many pods are they giving you and what clamps. Are they supplying a matrix top or you machining your own so are they supplying the machining programme and cutter. The clamps are expensive and can be £5k pair depending on spec or how or what you want to clamp single or double. Your post did not state tooling projection cost, are you benefiting from existing tooling and how much is HKS or you going down the Collete route to suit existing tooling.

You did not mention how much experience you have with this type of machine, my experience is that you only get the best from this machine by thinking out processes of manufacture, jig making designing and wrong tooling prevent best utility of this technology. I did read some mention of the CNC machinery made in your shed variety. These are nothing like what the large industrial as you wish to purchase can deliver in reliability, versatility and down right ease of management. I put this in the same category as kit cars, they can go fast, they can be built in your garage but they are not a Porsche. Sorry industrial machinery has harder life and downtime is not an option as time is money and you need parts of the shelve not specially turned or one offs. That takes us on to the other issue with this technology in industrial settings as they can be too good, and you over load them with hogging/roughing out, shaping, boring, engraving and even sanding. So you lose what you wanted at the start which is quickness and accuracy between batches. You will also quickly run out of tooling heads down this road as well and it slows the machine down through each process or tool change.

As you mention doors to be made is a CNC Spindle like a Martin not an option with a good second hand SET even CNC one. I know it will not allow you to carcase units. I do not know your moulding capacity so are you thinking this will be a one stop machining for door manufacture. Meaning placing in square batten in pod clamp shaping/moulding/tenoning rails, moulding the panels and Moulding stiles. You can C Axis these machines and you can then mortise the parts. I was never in favour of taking the haunches out on my Router and did this by hand or Bandsaw as the tool used in router leaves a round or cuts in to tenon to eliminate this, I never liked the look myself, just me though I see it done.

Without a C Axis add another £20k to budget or 5 Head add another £40/50k, you cannot cut out with square corners, there is a way by drilling each corner but again cuts into inside the cutout line. The C Axis/5 axis just tilts a drill and goes up and down vertically in the corner to square it so you can bead in a square edge. I used this a lot on making door cassettes for Premdor range of doors made from pressed mock paneled interior doors that needed glazed. I made the beads on the CNC as well along with them pre-mitred from HDF. The trick was to to make them from deeper board thickness leaving a vacuum clamp face on the sheet. Then sand them out on my sander they just fell out at the other end then you just denibbed and stapled together, I loaded half sheets to get full top/bottom and sides so each sheet supplied a face of a door, I made 1000's in production by this method.

CNC Routers are great machines and great when they go, a pure pain in the buttocks when they do not. You spend a lot of time developing processes, finish & jigs, time seems to fly. But for repeating quality and precision you will wonder how you did without. Then you start over loading it. But you may well know all this and I am preaching to the experienced, so please excuse me if I am. I have vacuum clamp or sucker cup lifting arm fitted between my Beam and Router, great boon for lifting and is easy even the older workers love it saves your back greatly.

SCM are slow to respond to breakdowns as I experience yearly with my Griggio, Beam and Belt sander, you may be closer so this is less an issue. But ownership and sorting when things go pop is a major concern that is why I changed. I am considering changing machinery again.
 

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