New business-Need property

Premier_2

claire8370 wrote: »

Just wondering whether I would need to go for buy to let mortgage, or buy the property to do up how we wanted and then decide to let, if it doent work out at least theres a house there in the end, to sell or live in. Lol

Also does anyone know what help there is to female women in business. Or whether someone would be able to help out with a deposit? Looking at house around £200,000 mark.. in current financial climate doesnt that need a £40,000 deposit

You'll need a commercial mortgage for this kind of business venture.

Most BTL's require you to let the property under an assured shorthold tenancy agreement, which this obviously won't be.

I don't know the current requirements of commercial mortgages, but they tend to be at a higher interest rate (could be as low as 1% more) to BTL mortgages.

Most BTL mortgages require at least 25% deposit (only 2 I know of currently lend more) - I expect commercial mortgages will want at least the same if not more.

claire8370

Thanks for that premier.
We thought of this as a minimal risk business to us, I.e if it did not work out there is still a property available at the end to re-sell or live in. How is a commerical mortgage different? would this be difficult to sort out if it 'flopped'
Would organisations who help business people out be likely to help us with a deposit?i.e matching our input
Sorry for all the questions, I just do not have a clue.
Best get saving I think

Debras_Angel

Hi Claire,

have you had a look at business link as they have lots of practical advise.

http://www.BusinessLink.gov.uk

claire8370

Yeah I have looked, they are good, but I still feel non the wiser as to where to start off and with no money its so frustrating
Suppose I need to draw up a good business plan, get down the bank and see what my options are maybe?

crafty*kate

Make an appointment to talk to a Businesslink advisor before you go to the bank - they can help you work out your business plan etc. They are really helpful.

claire8370

Me and my friend are 24 and 23 respectively, will this go against us having no property etc to secure upon?

claire8370

Bump..any more help or advice out there?

Doozergirl

claire8370 wrote: »

Me and my friend are 24 and 23 respectively, will this go against us having no property etc to secure upon?

The loan would be secured against your business premises. Not having your own property presently doesn't exactly go against you but there's no additional equity that they can take security of so you will have to come up with your own deposit. 25% is what they will expect.

Presenting your business plan to the bank is the way to go because they can set up a business loan dependent based on projected incomes in your business plan.

From an impression I got at work yesterday, my bank seems to quite like small B&B-like set ups because they get good security and the business has small overheads.

I'd reconsider why you wouldn't want to let to mixed sex groups. I think overall they are much better behaved than single sex groups and you're alienating a good part of your market for no real reason You'll find that many establishments do not accept single sex groups!

There will be fire regulations that the building will have to adhere to certainly.

Cleaver

claire8370 wrote: »

Sorry for all the questions, I just do not have a clue.

Sorry to be harsh, but why do you want to start a business in an area you freely addmit you don't have a clue about? What would normally happen is that people in that business who do have a clue will take your custom.

Doozergirl

Cleaver wrote: »

Sorry to be harsh, but why do you want to start a business in an area you freely addmit you don't have a clue about? What would normally happen is that people in that business who do have a clue will take your custom.

She's asking questions. She has plenty of time to research. One unit of self catering accommodation isn't exactly going to be the most complicated of businesses to run either.

New business can be built on a good idea, not just something you're already experienced at.