Recommendations on where/how to get a Business Loan (£15k-£25k)

mustangu

went to my bank for £18K loan to open a restaurant. Was told not to waste time filling in a application because we are not lending to the restaurant sector.

27col

If you have confidence in the future success of the business than it makes more sense to put the ISA money into it. At least you won't be crippled by interest charges.
If it is as good a prospect as you seem to think, then the ISA money can soon be replaced. If not, then at least you won't have someone coming after you for loan repayments and accumulated interest, further down the line and with only a failed business to your name. Good luck with your scheme.

DCFC79

mustangu wrote: »

went to my bank for £18K loan to open a restaurant. Was told not to waste time filling in a application because we are not lending to the restaurant sector.

How does that help the OP, you didnt even name the bank.

KingElvis

If you do a good Calzone then I'm willing to "review" your eatery for free.......Elvis ratings count for much in these hard times.

Good luck.

smartpicture

If you're going to be minority shareholders then make damn sure you have a shareholders agreement covering what happens if one of you wants out or you disagree etc (google it) - otherwise the majority shareholder can do whatever he pleases if he still owns >50%.

In my experience, a bank will always expect you to put up some of your own money, on the grounds that if you won't risk something it would hurt to lose yourself, why should they be willing to take the risk instead. You need to believe in it enough to put your ISA money in, and if you don't, who will? And the fact is, if it doesn't pan out, you will lose the ISA money repaying the loan anyway so you may as well do it the most cost-effective way, unless you think you might need that money to carry you through rough times.

Also agree with haggling hard, private business share sales are fairly stagnant at the moment.

Conrad

OP you seem like you know what your'e about, and you know the business so I'd say go for it using your own money.

A couple of points in case you hadn't considered them already;

+ I come accross situations like this where the existing onwer invites new shareholders in and simply uses them as a cash cow. Some people are extremly devious and mentally fence - off thier immoral behaviour with all sorts of self justifications. NEVER trust anyone, especially those who say 'trust me' Trust is earned over years.

+ Try and think of every possibility - what happens if this persons Mum is ill / they meet a new lover and they start going off the boil, what then?

+ All these things can be set out in a very carefuly worder shareholder agreement right down to weekly and daily acitivities and expectations and things like agreement on how much to put by for tax and hard times.
Make sure it covers illness - what if one of you was mentally ill / in a coma?


The point here is that if all the worrysome things are framed and organised in a joint agreement it actually removes a lot of stress and worry later.

Teatwosugars

Banks are very very strict on lending. Especially to Pubs & Bars. I know some that are currently refusing to lend to pubs. If you go down the personal loan route DO NOT say it is for business purposes!

gglaze

Came back from the holiday weekend to this wealth of helpful feedback, thanks a lot guys, all extremely useful info. If anyone wants to name specific banks they have had success (or not) with, that would be useful also.