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Loan for a van to start a business
I've posted this to the small business area too as I don't know where's best!
I'm usually pretty clued up on personal finances, budgeting, debt Management etc and get asked for help by quite a few family and friends as a result. All has always worked out. But this area has stumped me a bit so perhaps need an "Insider" to help.
Partners brother is trying to set himself up in business. Partners dad is helping as did the same business for years but family cannot help financially.
He needs to needs to buy a van to carry out the work, with speciliast hydraulic platform, for about 10k.
He is still in full time employment but has business lined up for as soon as he can get moving so no problems there.
He is 22, lives at home, has a bit of money in the bank, a small loan for 8k but no Credit cards etc. Never been in any trouble with money, credit file all looks great, credit score is good. On electoral role etc etc. Only brings home about 950 a month but only has the loan and petrol as an outgoing so can clearly manage the 8k plus the 10k repayments, which would total £212 for the 10k and £135 for the 8k per month
However, I suggested he apply for a Tesco personal loan as I thought he stood a good chance of getting it.
We decided to do this now while he is employed and state circumstances as such as thought this would stand him a better cgance of acceptance.
He was refused.
I'm guessing it could be a number of factors such as age, poor depth in credit history, debt vs. income etc.
Just don't know what to advise now. Don't want to risk another refusal for credit and another footprint on his file but also don't want to pay 53% APR to a loan company that claims to offer bad credit customers as he doesn't have bad credit!
Bank won't touch him unitil he has business on his books for 6 months at least.
No family can help finanacially includeing taking out the loan for him or securing it on a house.
So needs finance for the van and it has to be in his name.
So any ideas where to go next?
Also any implications on getting a loan when employed the going self employed?
Thanks
I'm usually pretty clued up on personal finances, budgeting, debt Management etc and get asked for help by quite a few family and friends as a result. All has always worked out. But this area has stumped me a bit so perhaps need an "Insider" to help.
Partners brother is trying to set himself up in business. Partners dad is helping as did the same business for years but family cannot help financially.
He needs to needs to buy a van to carry out the work, with speciliast hydraulic platform, for about 10k.
He is still in full time employment but has business lined up for as soon as he can get moving so no problems there.
He is 22, lives at home, has a bit of money in the bank, a small loan for 8k but no Credit cards etc. Never been in any trouble with money, credit file all looks great, credit score is good. On electoral role etc etc. Only brings home about 950 a month but only has the loan and petrol as an outgoing so can clearly manage the 8k plus the 10k repayments, which would total £212 for the 10k and £135 for the 8k per month
However, I suggested he apply for a Tesco personal loan as I thought he stood a good chance of getting it.
We decided to do this now while he is employed and state circumstances as such as thought this would stand him a better cgance of acceptance.
He was refused.
I'm guessing it could be a number of factors such as age, poor depth in credit history, debt vs. income etc.
Just don't know what to advise now. Don't want to risk another refusal for credit and another footprint on his file but also don't want to pay 53% APR to a loan company that claims to offer bad credit customers as he doesn't have bad credit!
Bank won't touch him unitil he has business on his books for 6 months at least.
No family can help finanacially includeing taking out the loan for him or securing it on a house.
So needs finance for the van and it has to be in his name.
So any ideas where to go next?
Also any implications on getting a loan when employed the going self employed?
Thanks
0
Comments
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why does he have to buy a van outright? Has he asked about leasing?Debt free 4th April 2007.
New house. Bigger mortgage. MFWB after I have my buffer cash in place.0 -
Leasing as in buying it on finance or renting?
It is a specialised van with equipment that nees to to go on a course to use so as far as I am informed you can't rent one?0 -
Then he may need to look for an investor and for that he needs a really good business plan.
Does he have a business plan and can he show that he has clients prepared to use his services?0 -
He does has promised business yes and is preparing a business plan. I wouldn't know how to go about searching for an investor really. I'll look into it thiugh thank-you. We have thought of the Princes Trust so will expand that idea too.0
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Tell him to contact Business Link once he has his business plan in place.0
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why does he have to buy a van outright? Has he asked about leasing?
He may have a slightly better chance with leasing as the deal would also be secured against the vehicle in much the same as HP.Don't lie, thieve, cheat or steal. The Government do not like the competition.
The Lord Giveth and the Government Taketh Away.
I'm sorry, I don't apologise. That's just the way I am. Homer (Simpson)0 -
Leasing as in buying it on finance or renting?
It is a specialised van with equipment that nees to to go on a course to use so as far as I am informed you can't rent one?
What's the specific technical term for the van type, is there an example of a manufacturer and model? Bet we can find a lease company that do it in half an hour.. not saying it'll be cheap or good, like, but my googlefu is strong...Debt free 4th April 2007.
New house. Bigger mortgage. MFWB after I have my buffer cash in place.0 -
£8k loan is not small for a 22 year old - putting himself into more debt by £10k would be madness - although it will never happen as he does not have enough salary to meet the repayments despite what OP states.
I do think renting or leasing is the only way forward if family cannot buy the van for him.0 -
I'm amazed you thought he'd stand a good chance of securing a 10k loan on top of his 8k loan when he pulls in just £950 / month. I'm sorry to be blunt, but as Jones says above, 8k is NOT a "small" loan (especially for a 22yr old!) and to increase that by another 10k would be madness.
I think the advice rearding renting / leasing is his only way forward, and leases aren't necessarily easy to get either.
Good luck whatever option you choose!0
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