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EFG Loan - Please help!
BorisDollar
Posts: 10 Forumite
in Loans
Hello everyone.
I'm in the process of purchasing a reasonably successful spa business. Purchase price is approximately £100k with profits of approximately £35k per year. I have a £50k deposit, and was advised by a broker to seek an EFG loan as I do not have any tangible security (I don't own a house in the UK).
Both Lloyds and Natwest have come back with the same concerns... business will not pass the vigorous stress test following loan repayments, my personal drawings, and potential for interest rates to increase over a 10 year period. They also stated they have some reservations about the sector the business was in.
Lloyds has said they can lend me £30k. So i'd need a £70k deposit, plus closing costs, which is impossible. I only have the £50k to put in, plus another £10k for closing costs and a lick of paint!
I don't understand. How can a business which is making £35k a year minimum (and has done so over several years) not be able to borrow more than £30k over 10 years?!?!
My personal drawings are extremely modest. £1.6k per month.
We have great plans for the business and believe we can increase turnover by at least 40% over the next 2 years. I have a good business plan & sound marketing strategy.
What should I do next?
Would really appreciate any advice which you can give.
thanks.
I'm in the process of purchasing a reasonably successful spa business. Purchase price is approximately £100k with profits of approximately £35k per year. I have a £50k deposit, and was advised by a broker to seek an EFG loan as I do not have any tangible security (I don't own a house in the UK).
Both Lloyds and Natwest have come back with the same concerns... business will not pass the vigorous stress test following loan repayments, my personal drawings, and potential for interest rates to increase over a 10 year period. They also stated they have some reservations about the sector the business was in.
Lloyds has said they can lend me £30k. So i'd need a £70k deposit, plus closing costs, which is impossible. I only have the £50k to put in, plus another £10k for closing costs and a lick of paint!
I don't understand. How can a business which is making £35k a year minimum (and has done so over several years) not be able to borrow more than £30k over 10 years?!?!
My personal drawings are extremely modest. £1.6k per month.
We have great plans for the business and believe we can increase turnover by at least 40% over the next 2 years. I have a good business plan & sound marketing strategy.
What should I do next?
Would really appreciate any advice which you can give.
thanks.
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