10-19-2008, 11:31 PM
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| | | Join Date: Jul 2005 Location: Canada
Posts: 11,564
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Originally Posted by Hailman  Maybe I'm missing something here, but why if you are going to start a new business would you use 100,000 of your own money to buy one machine? Would you not be better off buying a number of different machine with the 100k as a down payment and making payments for 3 or 5 years. Then the 100k could be 20k on 5 machine and you would have depreciation on 5 machine that maybe close to your 100k? |
It is called leverage; finance your company with far more debt than equity. When things are booming you rake in the dough; when things turn down you lose all the machines but probably still have some debt to pay off.
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