Business Loan help please

stroudy89

Hi

My Wife and I are opening a business soon and need 28,000. 14,000 is coming from a non profit making agency and the other half from a bank, the problem is most banks want us to put some in, which we haven't got! They love the business plan but too scared to offer this without any security from us (house is shared ownership).

What are the chances if we took out a couple of personal loands for 6,000 each, that we would be caught using them for a business?

Or any other ideas, we are not eligible for grants or loans from people like Princes trust.

Hope someone can help

Paul

Rafter

If you are capable of getting a personal loan then this is an option.

Banks generally don't like you borrowing for your own business, particularly if this means leaving your current job, the income from which they were relying on to meet the loan repayments!

R.

Mark7799

I'd agree with Rafter. There is usually no major problem with getting a personal loan for business use providing the bank is happy to lend but the usual caveats apply that if the business fails, you will still be liable to meet the loan repayments. Incidentally, from your maths, 2 P/L's @ £6k each leaves you £2k short - is this a typo?

savvy

Hi stroudy89

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere(please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email [email="abuse@moneysavingexpert.com"]abuse@moneysavingexpert.com[/email].

Pennywise

If some of the money is needed for equipment, why not finance each piece of equipment under hire purchase or lease - getting several different relatively small HP/Leases would be far easier than trying to get one big loan.

If some of the money is to finance debtors, you'd be better going for factoring or invoice discounting - again far easier than getting a loan.

Have you considered setting up via a limited company? It seems like you're getting into a lot of debt with the business and if it fails, you risk losing your home, especially if the business is joint ownership by exactly the same people (yourselves) as the mortgage. Using a limited company can limit your personal liability - just a thought.