Business loan & Debt?

ali82

paulwf wrote: »

To be honest I don't think there's a way I sugar coat this so excuse my bluntness; your chance of getting funding is virtually nil.

For starters getting a basic business account is very difficult if you have bad debt (I presume you mean CCJ or debt management plan by that) let alone a bank loan.

Next a bank would generally want you to put in at least 1/3 of the total outlay and they would put in the rest, with you providing security independent from the business assets. The actual figures don't matter but you get the idea, you're looking more like £10K than £2.5K.

You also need to do as much groundwork as possible using your own funds before you draw down the loan. This is because business transactions are frustratingly slow (what should take a week takes months). So, you need money to do a survey, shop plans, any training courses and research etc etc. That way you can do all the foundation work and only draw the loan when the shop is about to open so you can generate revenue and start paying it off.

Borrowing money is also costly and eats massively into your profit margin. You're going to be servicing too much debt and you are relying too heavily on the project succeeding from day one. Ideally I would suggest clearing all debts then one of you having a stable reasonably paid job so the other one can go off and be the mad one trying out business ideas

Sorry to not have anything positive to say. Is there any way you can test out the idea on a small low cost scale and ramp it up from there?

In my experience it was the opposite. I have bad debt, I got my business account with my bank (same as my current account) and I got a business loan and a small grant through my local business centre. I have been trading for over 4 months now.