Shall I sell or downsize to raise money for a business venture

MYERE

Hi everybody

I'm new to this so I hope this is the right place to raise this issue.


I hope someone can help me make up my mind about this. I have the opportunity to go into business (I and my business partner have done all the necessary research etc...).

I was planning on selling my house and moving to a smaller place to raise the money but something is telling me not to sell. That I might be better off trying to raise the money through other means (loans, grants etc) and keeping this house.

What do you think? Suggestions please - BTW I love this house!

Thanks

A

Thrugelmir

MYERE wrote: »

That I might be better off trying to raise the money through other means (loans, grants etc) and keeping this house.

In what way better off?

pinkteapot

If you love the house that much, make sure you set up as a limited company and use business loans or you could lose the house anyway...

kingstreet

pinkteapot wrote: »

If you love the house that much, make sure you set up as a limited company and use business loans or you could lose the house anyway...

I can't imagine in a start-up he'll get credit without personal guarantees and/or a charge on the property either way.

downsizer3

Firstly I would investigate all the 'loan' options available - on the basis of what equity you have, what could you borrow and at what rate etc.
Secondly - get a valuation and estate agent to give you an idea of the local market - could you sell just now? What would you get? If you release equity it normally has to be for home improvements - unlikely for a business start up.
Any loan would require to be secured on your property - what would happen if it went wrong? Chances arre that the start up money will take a good while to pay back - you won't be 'secure' for a long time yet - would you rather have the peace of mind? If you were a limited company there is some safety net - but if you default on a loan - your property is still in jeopardy. Can your business partner raise cash too - is it split? What other options are there?
No easy answer - but the bottom line is a larger mortgage plus a loan when you won't be earning may overstretch you. Best have all the figures - and assume you'll not earn much if anything for a year at least.
I have my own business - times are really tough obviously and I don't have any borrowings business-wise. I downsized to make sure I had as few outgoings as possible in this climate - makes for a better sleep at night!
Good luck.

MYERE

Thanks everyone

Perhaps 'better off' is the wrong thing to say...

Thank you so much downsizer I do need to sleep better at nights...

A