Loan advice - please help

carchris

Hi

I am currently rejuggling my finances due to starting a new business of recent.

Im 23, purchased my 3 bed mid-terraced house in 2007 for £205,000 and put in a deposit of £35,000. I went from renting to buying so stuck with interest-only initially on a fixed deal untl November this year. I have spent £25-30,000 on renovations including a 20ft x 14ft conservatory, new carpets throughout, kitchen, bathroom, garden, garage door, cladding etc. Obviously I bought pre-recession but I got £18,000 off the asking price and didnt get a bad buy....so think its worth somewhere between £210-220k realistically (im a letting agent so know the prices relatively well).

Due to the above renovations I spent quite a bit on credit cards - to the tune of about £8000 - to which I cleared with a personal loan.

I recently setup my own business trading cars and its been going really well but basically being a newly formed limited company (2 months) I cant easily get a loan for at least a year.

I am considering trying to obtain £10,000 funding in order to enable me to buy 2 more cars for my stock, but I dont know who would be best to consider given that I have quite a bit of borrowing!

I have considered trying to add this to my mortgage but I doubt they would because all they are going to do is look at the purchase price: £205,000 in 2007 - and then take off 10-20% in my view. The fact ive done substantial work probably wont be accounted for?

My income:

Basic: £36,000 - current job been in for 2 years, 9 months
Rent from a room in my house: £6400
Car trading - on average I have made £2200 a month after expenses from being able to purchase 7 cars each month. I think I can make about £35,000 a year out of this but if we say £25,000 that is definitely realistic.
Therefore:
income £68,800 - £5733 pre tax per month

My fixed outgoings:
Morgage: £795
Personal Loan: £280
Credit cards: £100
Council tax, elec, gas, sky: £350
£1525.00 per month

I rang up my bank last week and they were really hostile saying my outgoings were to high for them to consider me even for an extended overdraft for a week! (HSBC). At this stage I had £400 a month going out on my own car which i have just sold however. I dont run a personal car anymore as I just use whatever I have in stock at the time.

I have never had any problems obtaining credit in the past and the car I had (£20,000 on hire purchase) I was accepted for immediately only 4 months ago prior to this new venture.

Any advice would be really appreciated as I dont know the best way to go about it.

Many thanks

Chris

Rafter

Chris,

In the current climate, I think you are going to struggle. As you say you don't really have any assets to secure against.

You could try the motor trade finance arms of the major banks and use your stock as security, but as you already say, they probably want a bit more evidence that you are trading profitably over a longer period of time.

I think you are just going to have to bide your time and build your stock from retained profits.

Good luck

R.

nomoneytoday

Also, if you buy a lemon or 2 that will cut the profits down pretty quickly. Maybe not likely, but the bank will look at the worst scenario?

CLAPTON

I'm a bit confused about your outgoings... are you really saying you only spend 1,520 per month?. and have an income of over 5,000?

if so you must be able to save a couple of grand (even allowing for tax & NI provision) do you really need a loan?