I want a £100,000 loan, is this possible?

a_j_bingham

Hi BL1,

Back to more constructive matters!

Just to clarify, if you actually spent £100,000 on equipment, and all of it included VAT, the actual amount of VAT you could reclaim would be £14,893.62 (£100,000 gross *7/47ths = £14,893.62 VAT). So the cost would be made up of £100,000 gross, £14,893.62 VAT and £85,106.38 net(£85,106.38 net *17.5% = £14893.62 VAT).

Using your example, you would actually have to spend £117,500 on equipment to end up reclaiming £17,500 of VAT(£117,500 gross *7/47ths = £17,500 VAT).

You fill in a VAT return, typically on a quarterly basis, in which you include your output VAT and your input VAT, if the output VAT (VAT on sales) exceeds your input VAT (VAT on purchases), you pay the difference over to HMRC. The amount payable is due within one month of the quarter end. If the output VAT is less than the input VAT, you will be due a repayment of the difference.

It is important to distinguish between net and gross. For example if a customer was asking how much the gym membership cost, they would only be interested in the gross price, price including VAT, however if you were receiving a quote from a supplier for equipment, typically it would be stated net, price excluding VAT.

Have a look at any invoices you may have lying around, this will hopefully illustrate how businesses account for VAT.

Regards,
Andrew.

BL1

Hi Andrew

Cheers for that, i think Im finally beginning to understand it :rotfl:

The business plan is going well, although I am finding it quite hard to budget for building costs, Im finding it hard to estimate the costs of showers, toilets, etc.

I think building costs will be around the £100,000 mark, does that sound too high?

BL1

a_j_bingham

Hi BL1,

I'm not exactly sure what your plans are regarding the building. Are you planning on purchasing and rennovating an existing building or are you constructing a new building?

Clearly the price would be determined by the size, specification and location of the building.

It's impossible to speculate on the price until you've decided on the site and then, depending on the level of work involved, you would need plans drawn up by an architect, quantified by a surveyor and finally quotations from builders.

Sorry, I can't be of more help on this.

Regards,
Andrew.

johannamse

BL1 wrote:

I think building costs will be around the £100,000 mark, does that sound too high?

You need to do more research...much more. I am not having a go, this will be for your own good. You only have to watch all the TV programmes, "Building a house in France etc etc. They ALWAYS go over. ALWAYS. Get building quotes and then add on a large contingency bit.

BL1

I'm planning on purchasing and rennovating an existing building. So what do i put into my plan. I do not have a particular location in mind, i was going to wait until funding had been secured. I am from now until i secure funding, will be a number of years in which time a location i had chosen would probably have been bought by someone else, so i thought it best to wait

BL

jonesMUFCforever

Are you not putting the cart in front of the horse here?
If you have no location in mind , you have no property to renovate,thus no need at present for a loan.
Whilst it would be good practise to get an offer in principle so that if an opportunity arose you would have access to funds fairly quickly I do not see anyone lending you £100k unsecured.
Also as other posters have advised here if you think it will cost you £100k then bank on it really costing £130k if not more.
Eric

BL1

Hi johannamse and eric

I appreciate what your saying but i have well over estimated i do not plan on spending £100,000 that is just a safety number in case i go over.

I dont think i am putting the cart in front of the horse as you say. The way i have done my plan i can open the facility anywhere in the country as long as it fits certain requirements, which means im not limited to one place. As i said before i could write a plan for a building in Chester, wait for funding and then the building is sold to someone else, which means i will have to start the process again.

BL

jonesMUFCforever

So if you go ahead with a plan then my suggestion is to take out a loan (if one exists) where drawdown can be made in stages rather than all at once - this will stop interest accruing on money that is not required.
It does come back however to my point that £100k is a lot of money not many people will be able to arrange that kind of loan without security.
Eric