How Do I Borrow Money For My Business?

MDUK

advice needed please.

we have an opportuniyt to grow my wifes business - i need about £10k right now and my forecasts show i will be £5-6k overdrawn my month 5. my forecast shows it is up hill after that i will be in very slight profit by month 12. This is tracking real figures based on existing similar businesses so shoudl be acheivable.

i want to put the money in the business as a directors loan £15k (as i beleive i can get a better rate this way - borrow it over 5 years - aim to pay it back in 3) i applied to northern rock at 6.2% with no early redemption penalty but have been turned down. That really suprised me - don't have huge debt, a viable business for my wife and i am employed. but it is a good rate and i guess they can choose to be picky.

So i need to find another lender - i wondered whether i should pay for a credit check on myself to see if i can identify why we were turned down, rectify it and apply with someone else.

We are currently £5k overdrawn in the business but have that in debtors and should get that in in the next few weeks. The business currently owes us £14k in directors loans (which i am not in a rush to get back - i can wait until the business is able to pay us back)

The bank have agreed to increase our existing overdraft to 10k - maybe more(they obvioulsy have the last 10 years trading figures) so i could do it on that and a smaller personal loan but i think this is an expensive way of doing it. i want to pay the debt off in 3 years and if we can do it earlier by not taking a higher salary we will.

i am wondering whether to ask the bank for a business loan rather than a higher overdraft but this is likely to be around 8.7% which seems high.

Any advice on how to go about this would be appreciated.

The reason for going for this is if we can make it work, we are 3 years from a good income and a sustainable business as opposed to a very average income and 'just a job'.

thanks for taking the time to read this.

M