Getting loans when I am in an IVA

boxerboy

Hi everyone

I am hoping you can help.

My partner and I are in our last year of our IVA and we want to set up business or rather buy an existing one with clear profit margins and room to expand and increase the business.

1. I'm being told that you cannot get an unsecured loan as this would be in breach of the IVA - even though there are some companies that seem to be able to lend, granted at pretty high rates, no credit checks etc.

2. Also I am being told that I couldn't try to get a secured loan without my IP approval - is this correct? As I understood that IVA's were for unsecured debt and nothing else.

We so very much want the lifestyle change and even with only a year to go util the end of the IVA, another year of waiting until the files are cleaned is just too long to wait we are desperate to get out of the 9-5 rat race and build a business before we are simply too old to do it.

3. How can we do this?

Thank you in advance.

Boxer boy (not that I like boxershorts but cos I have a boxer dog)

Choo_Choo_4

I am sorry to say Boxerboy that you would breach the terms of the IVA if you took out an unsecured loan before the IVA has completed.

YES - you are right to say that the IVA takes into consideration all unsecured debts so I presume that you are a homeowner if you're considering taking out a secured loan?

If so, then there must be SOME equity in the property for any company to offer you a secured loan and if this is the case then this would be expected (or a %) to be brought into the IVA hence the IP needing to sanction it.

IF there is realisable equity in your property then you might be able to try to remortgage in order to settle the IVA early and then consider options re business BUT at this stage I would say that you would be best to complete the IVA successfully first - you've come this far it would be madness to allow it to fail now by taking out a loan.

Obviously you have thought long and hard about going into Business ... you don't want to come out of the fire into the frying pan ...

boxerboy

Thanks for the advice - its back to asking the family then and raising funding from other sources

cheers

Choo_Choo_4

Might be the best thing to do Boxer if this is an option. It would be a shame to do anything that might risk the success of your IVA after coming this far

Good Luck!

Choo_Choo_4

Actually Boxer ... I was thinking about it ... and there IS a way around it but it's not easy and will require a lot of work to get all your ducks in a row.

The IVA proposal states that " you cannot get credit without the permission of your Supervisor " (note that is Supervisor, not creditors - so it's at the discretion of your IP)

So what you need to do is:

1. Get your business plan in order with detailed projections, cash flow etc;
2. Show that you will be able to maintain your IVA payments (it might be possible for you to request a payment holiday for 3 months in the IVA but it is also likely that you may then have to extend your IVA to cover this by 3-6 months);
3. If the business is going to be profitable you will need to show that not only will you be able to maintain your payments but you might even be able to afford an extra £100 or so per month.

So you can see that it is possible but it will require a lot of work on your part and might not even work out - you would be taking a risk obviously by starting/buying a business which could even result in an IVA Failure if it all went wrong.

Be very careful as well about WHERE you are getting the loan for this (you've already mentioned extortionate rates) - don't rule out the notion that a High Street Bank might still lend you the money.

But remember that before you even consider this you NEED the permission of the IP.