Spend savings OR Borrow?

ben_richards_2

Hello,
I am looking at buying into a photography franchise having being made redundant.
This will cost around £15,000 and i currently have £8,000 savings.
I have a car which is currently costing £345 a month (a bill i would like to eliminate)
Should i use my savings to pay the £6,500 balance off my car and go to the bank for a business loan for the franchise or should i keep hold of my savings and lend more money so i have some money for emergencies?
I wouldn't really want to sell the car as i've had it from new and probably wouldn't get what i want for it....and if i did i would still need to spend money on a reliable car for the business!
I'm not sure at present how new business loans work regarding the possibility of deferred payments on start up etc ...but i wouldn't like the prospect of having to find not only the business loan payment but my car payment aswell as i'm trying to get it off the ground.
Any advice would be appreciated
Regards
B.R

jimmyboy420

Well, if you were trying to find both, you'd have your savings to back you up if you were having a "lean month".

But, overall you're better off with as little debt as possible.

I'd personally always like to have a little set aside as rainy day money, especially if I was taking a risk on my short term income by going in to a franchise.


How much savings would you be left with if you paid off the car loan?

ben_richards_2

I'd be left with £1,500 which isn't alot to take to my bank to start something up!
I think they may need more from me if i was to ask for £15,000 to start the business??

westv

I suppose two important questions you need to ask yourself are

1. How certain am I that the franchise will create income?
2. How much income will it create for me?