Best chance of getting a loan, six years on from bankruptcy?

nothingsimpossible

Hi all,

I was discharged from bankruptcy six years ago, and my credit report with Experian is looking pretty good now (962/1000 points). I started a small business three years ago in a village/small town, having borrowed £2,000 from a relative to set it up. I'm a single mother too, so have worked extremely hard. It's a retail business, and I now want to get a bank loan of approx £11,000 to secure a retail premises in the much busier and larger town 10 mins down the road (it's actually the fastest growing town at the moment according to various sources). It's a risk of course, but competition is not really an issue as I have a particularly specialist shop with very unusual products. (unless a worthy competitor pops up just as I am relocating of course!). What I want help with is knowing which bank or provider is most likely to grant me the loan I need, knowing about the previous bankruptcy. I have personal and a business a/c with Barclays ... any ideas? I know it's not good to get turned down too often as it will have a negative impact on the credit report. Thanks for any advice!

DCFC79

nothingsimpossible wrote: »

Hi all,

I was discharged from bankruptcy six years ago, and my credit report with Experian is looking pretty good now (962/1000 points). I started a small business three years ago in a village/small town, having borrowed £2,000 from a relative to set it up. I'm a single mother too, so have worked extremely hard. It's a retail business, and I now want to get a bank loan of approx £11,000 to secure a retail premises in the much busier and larger town 10 mins down the road (it's actually the fastest growing town at the moment according to various sources). It's a risk of course, but competition is not really an issue as I have a particularly specialist shop with very unusual products. (unless a worthy competitor pops up just as I am relocating of course!). What I want help with is knowing which bank or provider is most likely to grant me the loan I need, knowing about the previous bankruptcy. I have personal and a business a/c with Barclays ... any ideas? I know it's not good to get turned down too often as it will have a negative impact on the credit report. Thanks for any advice!

Your credit score is meaningless (people need to get over the fact that scores aren't worth it).

Surely you would need some accounts to take to maybe your bank manager to see if a loan is possible.

nothingsimpossible

I have two years of accounts showing small profits. Third year not completed yet. I do not own a home or really have much collateral - stock holding of £17,000 tho. I will try my own bank first but want to have some others to try if not successful with Barclays. I appreciate there is risk to a lender so would expect a higher interest rate. I just want to know if anyone's been in a similar situation, and how/who they managed to get a loan with. Thanks. And comments about pyjamas not particularly relevant actually.

DCFC79

nothingsimpossible wrote: »

And comments about pyjamas not particularly relevant actually.

If you read it correctly i never made a comment about pyjamas but ill leave it there for you to figure out.

Tixy

What credit products have you had since you were discharged? have you gradually built up a credit history with things like small sub prime card limits or catalogues etc over the last 3 years or so?
What do your credit files show (not the score the actual credit reports)?

nothingsimpossible

Hello Tixy,

That is probably a problem - I have never borrowed since the bankruptcy. I have a contract with T-mobile - that's it, and pay quarterly on my gas and electric. I used to be fund manager with a well-known investment bank in the city. When daughter came along, and my alcoholic partner, her father, refused to work for two years, I supported us all until the money ran out. At the time I had credit card debts which (back then) were not that huge - an annual bonus could have cleared them in one hit, but in the end, for other reasons too, I had to leave that job and that life behind, declare myself bankrupt and start from absolute scratch. Just a bit more background to fill in the picture. I know I should have tried to borrow before now, but I didn't want to really. I only want to borrow now in order to grow my business. I have an ecommerce website but it's slow to get going too. I'm convinced if I can put this shop where there is greater footfall it will do very well. As it is I have some customers travel 30-50 miles to visit the shop in the "village". If I could physically pick it up and put it in an affluent area of London it would make a fortune! I'm not in a position to do that yet, but the larger bustling town would be the next step. Thanks for your sensible input.

nothingsimpossible

The credit report shows one small debt of £28 ! relating to the bankruptcy, which should disappear by May. I dont know why this one had a different date to the others. Otherwise , everything is paid on time except a few late payments on gas bill (only a month adrift).
thanks.

Tixy

Did you not do a post bankruptcy credit file clean up to ensure all debts in the bankruptcy had the correct date listed?

If you've no credit accounts then going from not having managed any credit for 6years to getting an £11k loan is likely to be difficult. You haven't yet proved that you can now handle credit responsibly again. I think there is little chance that a bank will want to risk as much as £11k without some sort of security.

Have you done a business plan and robust financial projections? detailing what the loan will be used for and demonstrating that the business will be able to afford repayments and provide you with a living profit?

nothingsimpossible

Tixy,

1. No I didn't -

2. Yes, I see. Therefore wondered if there institutions available to me that are any known to take greater risks?

3. In the process of doing this, and of course wouldn't apply without all facts and projections in front of me. However, projections are fairly meaningless really, as noone knows what can happen in the future, and they are somewhat guestimates - but take your point.

I don't see what I can put down as security, BUT I have every incentive going to make it work - it may be my last shot at a decent life for me and my daughter. I've worked seven days a week, full-time, for the past three years, and I have grown it to the point where it cannot grow any further without financial input.

Thanks again.

Emmzi

If you believe in the idea, sell your stock. If you would not risk your own money, why should a bank?

nothingsimpossible

Emmzi,

Of course, but that takes TIME obviously. Happy to put up anything I have, but it's imperative that I move while there is a perfect opportunity.


As yet, noone has actually answered my question, which was, "Which bank or institution, or provider, is the most likely to grant a higher risk loan?"


If noone can actually answer that at all, please don't bother replying with suggestions that only an idiot would not not have thought of. I am not an idiot, I just want some advice on which bank to go to ... Santander, HSBC, Lloyds, or options such as Sainsbury's /Tescos loans.


Thanks