Loans for new business start ups

karlmedia

Hi guys, do you know of any loan companies that will loan to a new business start up approx £13k. Possible hold the machinery required as the asset with only only about £3k down payment on it.

I don't have amazing credit history but going forward now.

Thanks

[Deleted User]

Take a business case into your bank, as a first option.

bargainbetty

You will need to prepare a proper business plan and show a proportion of funding from your own means - banks are unlikely to fund 100% of a start up fee. The equipment will only be calculated as an asset at it's depreciated value, so they won't consider it as collateral for a loan of any greater value.

CKhalvashi

bargainbetty wrote: »

You will need to prepare a proper business plan and show a proportion of funding from your own means - banks are unlikely to fund 100% of a start up fee. The equipment will only be calculated as an asset at it's depreciated value, so they won't consider it as collateral for a loan of any greater value.

And the depreciated amount can be very low indeed.

We spent more than £500k on electrical equipment last year, that I'd be lucky to get £200k for now. Bear this in mind, as the bank will.

CK

Loft_Boy

As others have said your best bet is to produce a detailed business plan I would also see if you could see Business Link. They assist small company set ups and have relationships with Banks so may be a good starting point

On the figures you have suggested (£3,000 yourself and looking for an additional £13,000) I would suggest you would struggle.

The Banks will say that they don't want to own more of the business than you, if your stake is relatively small they will say that if things start going wrong the damge to you is less than it is to them

As a gauge most banks would look at about an 80% 20% split on a start up, maybe slightly lower but not by much would be my guess.

If this fails your best bet may be a business angel (think Dragon's Den type scenario)

CKhalvashi

Loft_Boy wrote: »

As a gauge most banks would look at about an 80% 20% split on a start up, maybe slightly lower but not by much would be my guess.

It's pushing 50/50 for new entrepreneurs now, and that's with a perfect credit rating.

I've owned a large number of companies over the last 10 years, and I doubt I'd get 80/20 split.

If this fails your best bet may be a business angel (think Dragon's Den type scenario)

Seedrs is the one I'd recommend, as you're a lot more in control, and also dealing with individual investors, rather than large corporates.

I've never dealt with them on the business side, but as an investor, I've found them brilliant.

CK

Loft_Boy

CKhalvashi wrote: »

It's pushing 50/50 for new entrepreneurs now, and that's with a perfect credit rating.

I've owned a large number of companies over the last 10 years, and I doubt I'd get 80/20 split.



Seedrs is the one I'd recommend, as you're a lot more in control, and also dealing with individual investors, rather than large corporates.

I've never dealt with them on the business side, but as an investor, I've found them brilliant.

CK

When I said 80 - 20 I meant in favour of the bank. Meaning that if you wanted 20k they would want to see you had stumped up 80k. Essentially giving you a majority shareholding

CKhalvashi

Loft_Boy wrote: »

When I said 80 - 20 I meant in favour of the bank. Meaning that if you wanted 20k they would want to see you had stumped up 80k. Essentially giving you a majority shareholding

This is the case then. Sorry for any confusion caused by the post.

CK