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Business starter loan - who would lend to someone with less than perfect credit score

m33r4
m33r4 Posts: 502 Forumite
Part of the Furniture 100 Posts Combo Breaker
I am after a business loan as a starter business. I don't have any savings as such. I own my house outright and have about £400 on credit cards which I am paying back at 0% interest. One card is being paid off by June 2010 and the other I can clear by September 2010. I don't intend to borrow any more money off credit cards. I checked my credit rating on annualcredit.co.uk and turns out my credit score is 738 out of 1000 [3 out of 5 stars] for late payments which are resolved.

What is my best option for getting a business starter loan for the amount of £13,000 please?

Thanks for your input.

Comments

  • m33r4
    m33r4 Posts: 502 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    I would prefer an unsecured loan so would appreciate some advice as to who to best approach.

    Thank you.
  • ILW
    ILW Posts: 18,333 Forumite
    Why not use the credit cards?
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    if you don't have enough confidence in your business to secure the debt on your home, why would a bank have confidence in your business?
  • m33r4
    m33r4 Posts: 502 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Thanks for the replies but I can see across this site the preference is more towards unsecured loans as opposed to secured. It seems the lenders who are ready to lend on secured terms like to stretch the repayment terms beyond 5 years at a higher interest rate. With secured loans, I am also worried about the variable interest rates - I would prefer a fixed rate over which I have more control.
  • m33r4
    m33r4 Posts: 502 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    CLAPTON wrote: »
    if you don't have enough confidence in your business to secure the debt on your home, why would a bank have confidence in your business?

    I have full confidence in my business but I want to try avoiding being a "sucker" for a secured loan that ties me for longer than I wish to be tied into repayments on fluctuating interest rates. I hardly think this questions my confidence in my business. In fact it takes a careful, calculating and forward thinking person to do well in business and this is why I am being wary.
  • m33r4
    m33r4 Posts: 502 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    ILW wrote: »
    Why not use the credit cards?
    Even if I used all my credit cards to their max I would be short of the funds I require for this venture.
  • Emmzi
    Emmzi Posts: 8,658 Forumite
    1,000 Posts Combo Breaker
    secure a variable overdraft on your house with a business current account. you can repay whenever you like. any normal high street bank will do - just ask to see the business advisor, with a copy of your business plan.

    to reduce fees required, go to the bank your mortgage is with, as they already have a security over it, so no legal costs.
    Debt free 4th April 2007.
    New house. Bigger mortgage. MFWB after I have my buffer cash in place.
  • Emmzi
    Emmzi Posts: 8,658 Forumite
    1,000 Posts Combo Breaker
    oops, just saw you have no mortgage.

    so, any bank.
    Debt free 4th April 2007.
    New house. Bigger mortgage. MFWB after I have my buffer cash in place.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    you may be able to get a 13k depending upon your income

    but for a business loan, unless you have proven business records, the bank would want to see that you are sharing the risk, i.e. putting your own money into the venture and/or securing the loan

    a secured loan doesn't have to be varibale rate nor is there restriction on early repayment.
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