Helpful ReplyBig loan worth it?

Post
BobbyVang
Hamburger
2013/06/07 00:11:11
Do you think it's worth getting a 2500$ loan for a Hotdog cart in a city of 510,000 population? It'll be a 9.50% rate of charge per year. Main population I believe is Mexicans and Asians. 
Foodbme
Porterhouse
☄ Helpful
Re:Big loan worth it? 2013/06/07 01:57:34
BobbyVang
Do you think it's worth getting a 2500$ loan for a Hotdog cart in a city of 510,000 population? It'll be a 9.50% rate of charge per year. Main population I believe is Mexicans and Asians. 

The REAL cost of that loan:
Let's assume you are required to pay it off in a year.
Let's assume it's simple interest, (Which it won't be)
The total cost of your loan would be $2738.
Your monthly payment would be $228.
Let's assume you make a NET PROFIT of a $1 a dog, after ALL your expenses,like food cost, insurance, propane, paper products etc., (but BEFORE you make the loan payment)
It will take the sale of the first 228 hot dogs just to pay for the loan before you put any money in your pocket.
If you sell 30 dogs a day, it will take 7.6 days to pay for the cart loan each month. 
60 dogs a day, 3.8 days
100 dogs a day, 2.3 days
Now, YOU decide if it's worth it.
post edited by Foodbme - 2013/06/07 02:10:00
BobbyVang
Hamburger
Re:Big loan worth it? 2013/06/07 02:17:27
Hmm thanks for the math. I think I'll just build one then for about 700$ then haha. Thanks for the very detailed post.