Running a sawmill business can be very profitable, but you’ll need the right equipment to operate at full capacity and maximize your earning potential. Because lumber machines and tools aren’t cheap, business owners often seek the help of sawmill financing providers to keep their operations going or to expand their capacity.
By having the right equipment, your business can significantly increase its productivity and sales. Many times, adding equipment will allow a business to broaden the scope of its services allowing the business to reach an expanded or new customer base. The equipment a company puts into operation is also a reflection of the organization and the sense of quality and professionalism provided.
This is just another example of how upgraded equipment can attract more new customers to your business. Financing equipment offers a more sustainable method of adding production assets than purchasing equipment outright, when taking into consideration how rapidly evolving technology could considerably devalue your investment in a matter of just a few years.
Sawmill Equipment financing and leasing terms offer very flexible options that will not stress the cash flow of the business, as most payback terms run between 24 and 72 months. Furthermore, buyout options are available, as well as the ability to add equipment to your lease at any time.
Compared to the average business loan, equipment leasing provides the following benefits:
- No down payment, with the option to purchase the equipment at the end of the lease
- Competitive fixed pricing and terms to fit your needs and business cycle
- Tax-free loan payments if the supplier/equipment vendor is not required to collect tax
- Tax-exempt leases for municipalities and other qualified government entities
- Customized leases and loans from $10,000 to $2 million
Starting a sawmill business is an exciting venture, but the cost of equipment can make it challenging to get your venture up and running. Lumber processing and handling machines are expensive pieces of equipment that often require a loan. Here are some tips to help you succeed at getting approved for sawmill financing.
1. Shop around for the right lender.
Whether you’re looking for large scale or portable sawmill financing support, having the right lending partner by your side is essential to your long-term growth. As with any business, you’ll want to find a reputable company that has a clear understanding of your industry and can offer knowledgeable support when needed.
2. Know your credit score and history before applying for a loan.
Before you begin the sawmill financing application process, make sure you take the time to understand your credit score and how it can affect your evaluation. If your business has been operating for years and is showing a history of success, you will likely have a high credit score, making you more appealing to lenders.
Financing providers typically require a credit score of at least 650, so find out what your prospective lender’s minimum requirements are before filing an application. Having too many applications in the pipeline without proper preparation can hurt your score further.
3. Determine how much capital you will need to operate your business and acquire new equipment.
Identify what types of sawmill equipment you need and how their costs factor into your total financing needs. This is important when applying for sawmill financing because lenders want to make sure they can provide a loan that addresses your immediate and future business needs. This also helps guarantee your ability to repay what you owe.
4. Prepare your business plan prior to applying.
Ideally, you should start this process well in advance. Your sawmill business plan will highlight your financing needs and explain how the funds will be used to bring in more revenue. Not only is this beneficial when trying to secure a loan, but it also makes you a stronger candidate for future lending opportunities.
Read Also: What Dealership Has The Best Financing?
Financing a sawmill need not be complicated, even if the machines are expensive. You can obtain the funds you need to succeed in this business by seeking the help of Charter Capital’s capable financial brokers.
Beyond trying to decide on the best portable sawmill for one’s needs, a number of questions associated with machine operation and productivity crop up regularly. The following provides clear, concise answers.
Even comparatively cheap portable sawmills demand a significant investment. If you just need a couple dozen 2x4s for a project, it will probably be cost effective to buy them at your local big box DIY store or lumber yard.
On the other hand, if you regularly fell your own trees or have access to a supply of whole logs, owning a portable sawmilling machine can not only save a lot of money over time, but also gives complete control over lumber quality. Buying a used portable sawmill can be a cost-saving option, but expertise is required to assess the condition of these machines. It’s not something we would recommend to novices.
The cost of a portable sawmill varies considerably. The above article includes some excellent examples from across much of the price range. High-quality entry-level portable sawmills start at around $2,500 for self-assembly models or somewhere over $3,000 assembled. At the other end of the scale, those with big capacities and hydraulic log lifters can top $50,000.
Leading portable sawmill brand Wood-Mizer recommends changing blades for fresh ones every 1½ hours. A random sample of users gave figures of three to six blade changes per day. Much depends on the wood being milled, however. Softwoods like pine saw much more easily than oak, for example.
Running a blade when blunt is false economy, as it’s one of the main causes of blade breakage. Sharpening services are widely available, or you could do it yourself using a jig and a rotary tool.
Logs should be sawed (milled) as soon as possible after felling. There is no advantage in leaving them on the ground. In fact, doing so might attract beetles and fungi that cause damage. Once milled, lumber requires time to dry properly: The general rule is 1 year per inch of board thickness. Commercial operations often use large drying sheds (called kilns) to speed up the process.