Loan for a Business (but not a business).

NickR_2

Hi

My Wife has decided that she wants to buy a local Hairdressers. The business will be leased, therefore (as far as I know), we wont be able to get a business loan.

So what options do we have to borrow approx £20000 ?
Any suggestions what kind of repayent period we should look at ?
Is starting a business a valid reason for personal loan ?

Current borrowings:

£76k (as a £46k mortguage + £30k extention loan) on a house worth £110k, 22 years to go...
A £15k loan which is down to approx £12, we are paying £1000 off a month, as we have taken a mortguage payment holiday for a year (9 months to go), loan is with Northern Rock.
No credit cards or outstanding finance.
Combined wages is £30k a year on paper, tho it is more in realility as half my wifes wages is tips and cash bonuses for busy days.

Thanks in advance Nick.

PS My first post on here, virtual credit card is on the bar !

jonesMUFCforever

First thing is you may well be taking a mortgage holiday but the interest on it continues to accrue! So in 12 months (or 9 months from now) you will owe a substantial amount more than £76k
If you continue to pay £1k a month on the loan you will still have £4k outstanding when you have to start repaying your mortgage.
You say combined wages are £30k how much is actually yours and how much is bottom line for your wife (forget tips and cash bonuses for now)?
What are your exact outgoings for things like food, insurance, mortgage, loans council tax,car insurance etc etc etc.
After paying everything off each month is there a surplus?
Does your wife have any idea about running a business?
Has she made a business plan?
Can you afford to live without any earnings coming in from her to begin with until she has set up?
Loads of questions there to consider but I have to say that with your existing debts I think you are pushing it a bit getting yourself lumbered with another £20k debt.
Just my opinion - if you decide to go for it and get a loan good luck.

Mark7799

As it's an existing business, you may still be able to get an unsecured loan on the strength of the business. Do you have sight of the last couple of years' (at least 3) accounts? Regardless of how you raise the finance, this is something you should be doing anyway to ensure you are buying a viable business.

How much is the business costing you? If you are looking to raise the full amount, it's unlikely you'd get 100% finance from a Bank - they'd expect a contribution from you, possibly a personal loan from elsewhere if you can't/won't put any savings up.