Offering credit

ThornyEng
ThornyEng Posts: 24 Forumite
in Small biz MoneySaving
I run a construction business and am looking at offering credit on small projects, typically up to £10k. I've looked at a few of these companies that offer credit online and they are looking for a turnover of about a £1m. I'm nowhere near that as its relatively new company.

Was wondering if anyone has got any thoughts on this?

Thanks

Comments

  • Mistral001
    Mistral001 Posts: 5,349 Forumite
    First Anniversary Name Dropper First Post I've been Money Tipped!
    ThornyEng wrote: »
    I run a construction business and am looking at offering credit on small projects, typically up to £10k. I've looked at a few of these companies that offer credit online and they are looking for a turnover of about a £1m. I'm nowhere near that as its relatively new company.

    Was wondering if anyone has got any thoughts on this?

    Thanks


    Is it credit to you or to your customers?
  • ThornyEng
    ThornyEng Posts: 24 Forumite
    It's for customers, for example they want a new kitchen the cost including fitting is £5k. I would like the ability to offer someone credit/finance to pay that.

    Thanks
  • oldoakey
    oldoakey Posts: 146 Forumite
    You may need a consumer credit licence which can be expensive.

    But before doing that I would suggest you contact a few credit providers to see if they would offer loans to your customers for the type of things that you sell.

    Google the term and just ring a few to see what they can offer.
  • Mistral001
    Mistral001 Posts: 5,349 Forumite
    First Anniversary Name Dropper First Post I've been Money Tipped!
    This topic was discussed here hardly a week ago. See http://forums.moneysavingexpert.com/showthread.php?t=5352240
  • Mr_Poves
    Mr_Poves Posts: 238 Forumite
    That's my post above , in honesty Thorny I would suspect it would work out better for people to just get a bank loan for that kind of cash , especially being homeowner's I suspect they would get more favorable rates .
    I've just started doing payment plans , there's so much you need to read up on and research .
    (my average job cost is £500 and under) so small fry in comparison ,
    However .... what happens when someone plays the fool and complains to the finance provider so they can get out of paying for the job ?
    I'm not sure how it would work , but can't see the funds being released to you until the customer was happy and the job completed ?
    There's going to be a big outlay for you initially , and if you get burned it will hurt .
  • ThornyEng
    ThornyEng Posts: 24 Forumite
    There's always an outlay in the building game, it's a part of business. I have credit accounts for example howdens and selco and so on, that is 45 days. The jobs are normally finished within 1-2 weeks.

    I realise it costs for a consumer credit licence, but the customer is getting the credit not me, the terms are no different from now, with phased payments as we go along on the job. If a customer refuses to pay the credit that is between them and the finance house, if they refuse to pay me we deal with that as we normally do.
  • Mistral001
    Mistral001 Posts: 5,349 Forumite
    First Anniversary Name Dropper First Post I've been Money Tipped!
    The turnover requirement might be based on the notion that small firms usually do not have the administration staff to swiftly deal with any problems that might arise regarding the credit agreements.
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