Finance options for a new furnace.
You walk into the finance company with a written quote from the supplier for the equipment you want to buy. You then fill out forms and sign a promissory note. The finance company then writes out a check to the supplier for the amount of the quoted equipment. Usually you need to provide at least 3 things: They will require you to provide your social security number and sign a document allowing them to check your credit history which they will look up using the social security number. Note that banks will generally give better rates on a personal loan than a finance company. People usually only use finance companies when their credit is so bad that a bank will not loan them money. Heating and cooling companies that provide equipment will often loan the money to buy that equipment. As a point of advice, it is generally poor financial management to take out personal loans and may indicate a person that is wasting money or be in financial difficulties. For personal loan items (furniture, cars, clothing, jewelry, etc) you are far better off saving money to buy the item, not borrowing beyond your means. If you need a new furnace and it is an emergency, for example, if it were winter (which it is not) and your furnace could not be repaired, then that might justifiable. But borrowing money at a high rate to just upgrade a furnace or get a luxury like AC is unwise.
Personally, I'd use my emergency fund first. It is unlikely (though possible, of course) that I will entirely lose my income at the same time I need to replace my roof or my furnace. I'd rather pay my emergency fund back with installment payments than pay off a HELOC to my bank. The lost interest on my emergency fund, which, after all, should be in cash, is much less than the cost of the loan. I could even set up an amortization schedule in a spreadsheet and charge myself interest when paying back into the emergency fund. That said, if I didn't have the cash in my emergency fund, I'd rather borrow against the house than finance with a contractor. If they'd even do that, which is unlikely--I've never dealt with a roofer or heating contractor that required anything but full payment at time of service. Home equity borrowing is generally the cheapest kind. I'm firmly in the camp of those who look at home ownership as a consumption decision rather than an investment. If the value goes up, great, but I just build in about 1% of the cost of building a new house (excluding the land price) into the housing budget each year, right along with mortgage interest, property taxes and basic utilities. Usually, that's enough to cover the major wear-and-tear related repairs (averaged over 3-5 year periods, anyway). What you are looking for is : Volatility http://en.wikipedia.org/wiki/Volatility_(finance) Normally you can't trade that directly per product, but a product like the VIX as a whole. Another option (sorry for the pun) is that certain option greeks deal with Volatility (vega I think?).  There are ways to value options to buy/sell against that options/products volatility  - but has some other side affects besides just pure trading of the Volatility.  You'll probably need a lot of Math and use of http://en.wikipedia.org/wiki/Black-Scholes to fully understand/trade on it though. "Home Improvements that improve the home's Energy Efficiency are currently eligible for federal tax credits. This includes renewable energy equipment (solar panels, etc.) and Nonbusiness Energy Property Tax Credit. The credit is 30% of the cost. From Intuit Turbo Tax: Energy Tax Credit: Equipment and materials can qualify for the Nonbusiness Energy   Property Credit only if they meet technical efficiency standards set   by the Department of Energy. The manufacturer can tell you whether a   particular item meets those standards. For this credit, the IRS   distinguishes between two kinds of upgrades. The first is ""qualified energy efficiency improvements,"" and it   includes the following:   •Home insulation   •Exterior doors   •Exterior windows and skylights   •Certain roofing materials The second category is ""residential energy property costs."" It   includes:   •Electric heat pumps   •Electric heat pump water heaters   •Central air conditioning systems   •Natural gas, propane or oil waterheaters   •Stoves that use biomass fuel   •Natural gas, propane or oil furnaces   •Natural gas, propane or oil hot water boilers   •Advanced circulating fans for natural gas, propane or oil furnaces" "I see two important things missing from your ongoing costs: maintenance and equipment. I also don't see the one-time costs of buying and moving. Maintenance involves doing some boring math like ""roofs go every 20 years or so and a new roof would cost $20k, so I need $1000 a year in the roof fund. Furnaces go every 20 years and cost $5k, so I need $250 a year in the furnace fund."" etc etc. Use your own local numbers for both how long things last and how much they cost to replace. One rule of thumb is a percentage of the house (not house and land) price each year keeping in mind that while roof, furnace, carpet, stove, toilets etc all need to get replaced eventually, not everything does - the walls for example cost a lot to build but don't wear out - and not all at a 20 year pace. Some is more often, some is less often. I've heard 5% but think that's too high. Try 3% maybe? So if you paid $200,000 for a $100,000 house sitting on $100,000 of land, you put $3000 a year or about $250 a month into a repair fund. Then ignore it until something needs to be repaired. When that happens, fund the repair from the savings. If you're lucky, there will always be enough in there. If the house is kind of old and on its last legs, you might need to start with a 10 or 20k infusion into that repair fund. Equipment means a lawnmower and trimmer, a snow shovel, tools for fixing things (screwdriver, hammer, glue, pliers, that sort of thing.) Maybe tools for gardening or other hobbies that house-owners are likely to have. You might need to prune back some trees or bushes if nothing else. Eventually you get tools for your tools such as a doo-dad for sharpening your lawnmower. Well, lots of doo-dads for sharpening lots of things.  One time expenses include moving, new curtains, appliances if they don't come with the house, possibly new furniture if you would otherwise have a lot of empty rooms, paint and painting equipment, and your housewarming party. There are also closing costs associated with buying a house, and you might need to give deposits for some of your utilities, or pay to have something (eg internet) installed. Be sure to research these since you have to pay them right when you have the least money, as you move in." Don't remember the exact details but I recall watching in class a video about a Chinese company that had (at least at some point) had a refrigerator manufacturing plant on the East Coast (Virginia?) because the skilled labor was indeed cheaper than China. I understand your process. I just don't think many people on Reddit have put together a $100M loan. Hell not a lot of people period have done that. I'd think the council or banks you are working with would have that experience.   When in doubt, just do what I do. Find something for a $1M loan and add a few zero's to it!   You mentioned the cold storage business - something I am very interested in. Thanks /u/LupusSuperius . Great information. Do you have any terms  or articles(perhaps on investopedia or similar)you can recommend I search for how much debt is ideal to take on for a start up?  I'd like to learn more instead of getting you to do my homework if that makes sense.  My simulation is similar to Capsim. We've made two strategic decisions: 1. We went capital intensive in the first year to build up factory capacity. Year 1 we have very little R&amp;D, but year 2 we plan to increase R&amp;D budget.   Since it is a capital intensive year, should that capital expenditure be funded by debt entirely and I leave equity alone? I noticed this drives down my WACC, but I see a decrease in NPV because of increased interest payments. Also does it make sense to increase the debt to pay for R&amp;D as well? The way I see it paying for the manufacturing plant on debt isn't bad because you get an asset out of it at the end, but paying for a R&amp;D program seems foolish because in this simulation there's a chance your R&amp;D program fails and does not provide results, so we would  see no return on the debt in that case.   Thanks again. Because some overhead expenses will be shared (accounting, most salaries, sales etc.) it's far easier to give him an ownership stake in the company because you won't be able to calculate net profit for each component correctly. What I would say to him is, in exchange for $80K and the contract with his building company (make sure it is significant enough to be worth it$ you will give him 35% of the company.   How did you come up with he $1 million in net profit calculation? How much of that is reliant on his business?