Business Loands?

[Deleted User]

Hi All - Sorry typo in title, cant change it :-(

I'm looking at a business loan to cover, some business debt that I have on my credit card! A new car that can tow unlike our current, a new trailer unit (selling the current as too small) and also another large item for business use.

The problem is that I now have no money at all! I have just paid off the finance for the above (said) car.

I have little debt now (ignore the sig going to update soon) only the debt from the credit card which is actually that of the business.

I want to borrow all of the money and have found that banks won't help. Our profits are nil at the moment due to the above issues - however we are really keen to make this work.

I'm employed and so support our own finances with this.

I have seen a number of companies (payday lenders I suppose) that offer loans to limited companies, they say that they do not hold you responsible, simply the company.

So my question is, could this be a good idea? Because if all fails then I could simply close the company and follow the insolvency process - worst case (not the plan!)

CKhalvashi

I'd not touch them with a barge pole (but I have been in business for a long time), as they're not known to be, errm, trustworthy.

Can it not wait? Can you not sell the existing car and buy a £1000 4x4, using the remainder on the rest? I've seen a Range Rover diesel with MoT for this in last few weeks.

CK

Brassedoff

As CKhalvashi has said, don't touch them. There is no such thing as directors non responsibility nowadays, not since the Companies Act 2006 changed, despite what others may say.

Anyway, your quandary is no bank will say yes (not even the one you bank with?), so your choices may be a partner (as in married type), going for a loan for you. Or put it on the home, if you own one and have equity.

I assume your business is a fast food mobile van? That type of business is erratic and not a sound proposal for investment. Don't take this wrong, but did you not set aside a small proportion from each week's takings to cover wear, tear and renewal?

colino

I think you need to sit down with a decent business advisor to look at your business in total. Shifting a business cost, while very, very, common to a personal CC is just plain daft. The wisdom too of needing a vehicle for business use and paying it off, instead of leasing it to fund from cash flow as you eat up its value, needs guidance too. Best of luck.

CKhalvashi

Brassedoff wrote: »

As CKhalvashi has said, don't touch them. There is no such thing as directors non responsibility nowadays, not since the Companies Act 2006 changed, despite what others may say.

Anyway, your quandary is no bank will say yes (not even the one you bank with?), so your choices may be a partner (as in married type), going for a loan for you. Or put it on the home, if you own one and have equity.

This is spot on advice, but as I mentioned, have a look at a £1000 4x4 first, and possibly a bigger trailer with p/ex on the one you have. That way, hopefully, there's no need to borrow anything, and you can build up to a newer 4x4 and trailer, if you so wish.

I was told that on the forum, we're all tight the other week; my theory is to start with what you have, and work up, rather than borrowing on something that may not work. Look into the car show circuits (it's the same 2-3 companies most years, but whilst pitches are expensive, you can be taking £5 a minute when it's busy), and consult the food standards people for certification.

I assume your business is a fast food mobile van? That type of business is erratic and not a sound proposal for investment. Don't take this wrong, but did you not set aside a small proportion from each week's takings to cover wear, tear and renewal?

Which if you come back to say you couldn't afford to do, this may mean that borrowing really isn't a good idea.

CK

[Deleted User]

Hi All

Thanks so much, didn't get chance to check until just.

Yes it's a food trailer and ours is very small.

We have 5* for food safety and everything that we need, however we have found at events we cannot keep up with demand due to our size and this reduces our takings and then profit.

We have also noticed that we are unable to offer all lines for example ice cream and slush, when in theory these items make a lot of money.

Again because of our trailer being small we are unable to apply to very big events and again this is limiting us.

We don't really make a profit, just a few pounds after all costs, but we feel the above is the exact reason.

My job is looking uncertain from next year and I want to take my business to the next level and make this my sole income. :-/