£5000+ loan for 20 year old? Good credit history

JoeBloggs1

Hi there, I'm 20, got a credit card within a week of turning 18, since then I've used it regularly (without going into the over utilisation threshold) and paid back in full every month. I have a good credit history, Experian rate me as ~980/1000.

I have no debts, other than the small credit card debt, which gets paid off every month. Lloyds have upped my credit card limit every time I've asked, it started off at £500, it's now at just over £2800.

I currently have around £12k in my current account, that should be ~£18-20k by the end of the week. I run my own business, which also has no debts, no business credit card (I've been using my personal account for business banking due to Lloyds screwing up, currently working that out with them and the FO, but as a result, have no real business credit history) and a very fast turnover rate, everything I buy is sold within 24 hours. (And no, it's nothing illegal!)

At my current speed of growth, I'm expecting to hit 6/7 figures PA by the end of the year, but I need growth to be faster - I have another business I want to start, but time is of the essence with that one, so the quicker I launch, the better. As a result, I've been hunting for a loan (APR isn't an issue, all I care about is approval rate) but it's impossible to find one. I don't care about how long the loan is for, although I don't really need more than a couple of weeks.

Max I'd feel comfortable taking is £30,000, but even a £5000 loan seems impossible to find. Even payday loan companies I'd be fine with, I did take a £5000 loan from my dad at 5% per day. Only real collateral anyone would be interested in is my car, which is valued at probably ~£1500-2000.

Does anyone have any ideas? My bank won't help, the past couple of weeks I've been using my credit card cash advance for ~£1000's worth, but that doesn't really help that much. Thanks very much in advance


EDIT: Forgot to add, currently living with my dad, will be moving out to London in the next couple of months. That could be expedited if it'd help (although when I checked initially, it didn't seem like it)

HappyMJ

The cost of credit is a very important factor to consider. It could wipe out all your profits. You can use your salary to show to a loan company to show that you can afford the repayments. If you set the term as long as possible then it will look like you can afford to borrow more as the repayments will be lower. You can however pay it back much quicker once you have the money.

JoeBloggs1

HappyMJ wrote: »

The cost of credit is a very important factor to consider. It could wipe out all your profits. You can use your salary to show to a loan company to show that you can afford the repayments. If you set the term as long as possible then it will look like you can afford to borrow more as the repayments will be lower. You can however pay it back much quicker once you have the money.

Cost of credit is very unlikely to be an issue, the loan I took from my dad worked out to around 40 million % APR, and even then I was still making a nice profit on top. I make between 8 and 14 percent a day, on good days, that has been as high as 20%. Currently putting in all my money each day, and it's back in with profits by the next morning.

I won't hit a limit in terms of profits until I hit the ~£40,000 daily investment mark. Since I'm self employed (due to a stupid rule that would wipe out my profits, in the process of setting up an offshore company at the moment), there's no salary documents, but my salary would be very clear to anyone looking at my bank statement, all money received is by bank transfer, and I generally get between 150 and 200 transfers in each day.

Good point on the length of credit, I'll try that.

[Deleted User]

I'm not sure I understand, you'll have £20,000 by the end of the week and need a loan of ~£30,000, can't you just wait a few more weeks? or borrow more from your father?

Taking cash advances against your credit card and applying for loans is really not good, you make yourself appear desperate for credit and every time you apply to another bank they're going to see just how desperate you've been for credit and turn you down. At this point you're probably not going to be able to secure any sort of loan.

The more money you borrow the more tenuous your position becomes, regardless of your business you need to take a very hard look at anything that is encouraging you to take out loans that are not sensible, disregarding the APR is a serious mistake.

Alternatively if your business is so successful have you considered seeking a partner? Someone that has the cash to support the growth you need and won't be expecting 1000% to be repaid if all goes to hell.

CKhalvashi

citricsquid wrote: »

Alternatively if your business is so successful have you considered seeking a partner? Someone that has the cash to support the growth you need and won't be expecting 1000% to be repaid if all goes to hell.

This is the best thing to be considered IMO, too, and I've been in business for the last 10 years.

As a ceiling, you're looking 20% growth per year, before the banks stop being interested. The concern to them, is how this growth will be funded.

If it's so profitable, consider a long-term investor, who will be able to support you, however I'm skeptical with these figures, as it doesn't seem possible in my business experience, unless it's FX or something.

CK

sharpy2010

JoeBloggs1 wrote: »

Hi there, I'm 20, got a credit card within a week of turning 18, since then I've used it regularly (without going into the over utilisation threshold) and paid back in full every month. I have a good credit history, Experian rate me as ~980/1000.

I have no debts, other than the small credit card debt, which gets paid off every month. Lloyds have upped my credit card limit every time I've asked, it started off at £500, it's now at just over £2800.

I currently have around £12k in my current account, that should be ~£18-20k by the end of the week. I run my own business, which also has no debts, no business credit card (I've been using my personal account for business banking due to Lloyds screwing up, currently working that out with them and the FO, but as a result, have no real business credit history) and a very fast turnover rate, everything I buy is sold within 24 hours. (And no, it's nothing illegal!)

At my current speed of growth, I'm expecting to hit 6/7 figures PA by the end of the year, but I need growth to be faster - I have another business I want to start, but time is of the essence with that one, so the quicker I launch, the better. As a result, I've been hunting for a loan (APR isn't an issue, all I care about is approval rate) but it's impossible to find one. I don't care about how long the loan is for, although I don't really need more than a couple of weeks.

Max I'd feel comfortable taking is £30,000, but even a £5000 loan seems impossible to find. Even payday loan companies I'd be fine with, I did take a £5000 loan from my dad at 5% per day. Only real collateral anyone would be interested in is my car, which is valued at probably ~£1500-2000.

Does anyone have any ideas? My bank won't help, the past couple of weeks I've been using my credit card cash advance for ~£1000's worth, but that doesn't really help that much. Thanks very much in advance


EDIT: Forgot to add, currently living with my dad, will be moving out to London in the next couple of months. That could be expedited if it'd help (although when I checked initially, it didn't seem like it)

Call me cynical if you like, but this seems to be a wind up/bored child (albeit with excellent writing skills) looking for something to do.

opinions4u

So you expect a profit of £6k a week (based on the increase in bank balance). You imply you'll be turning over £20k a week - seven figures annually.

Yet you're desperately trying to raise £5k. Or £30k. Regardless of cost.

Why the rush? Why not accumulate profit and capital for future growth at a sustainable rate?

It all seems a bit muddled.

DCFC79

I wonder what the business is and what the new business is all about.

CKhalvashi

opinions4u wrote: »

So you expect a profit of £6k a week (based on the increase in bank balance). You imply you'll be turning over £20k a week - seven figures annually.

Yet you're desperately trying to raise £5k. Or £30k. Regardless of cost.

30% margin (maybe more, from figures) would also give the impression that it's high risk, especially bearing in mind the implication that there is physical stock here.

We're on a 35%-ish gross margin, that actually works out to around 12% once our expenses (staff wages, office, vehicles etc) have been taken into consideration. For a new company, this is pushing it.

Why the rush? Why not accumulate profit and capital for future growth at a sustainable rate?

It all seems a bit muddled.

My thoughts, too!

adindas

JoeBloggs1 wrote: »

Cost of credit is very unlikely to be an issue, the loan I took from my dad worked out to around 40 million % APR, and even then I was still making a nice profit on top. I make between 8 and 14 percent a day, on good days, that has been as high as 20%. Currently putting in all my money each day, and it's back in with profits by the next morning.
.

With the loan for business the lender will definitely want to know more detail of the business you are running. People might be able to tell you if you tell more about this.

20yo, running business. Could still make profit even at 40mill % cost of borrowing ... ?

Goshhh ... Someone is probably living on another planet or confusing between the term of doing business and gambling (which some people might call it trading)....

Hopefully someday there would not be the end of family relationship with your dad if all the money is gone ....

worried48

If this really is a bona fide business (as opposed to a big gamble) I'd counsel taking things a lot more slowly, investing the profits back into the business rather than borrowing. Businesses can and do hit slow spells and what seems to fly off the shelves today can be out of fashion tomorrow.

It is very easy to be left with a lot of stock that looked like a bargain at the time but is now impossible to shift even at less than it cost you. We have several such items, which cost us in the low to mid hundreds each, that we have had in our storeroom literally for years because we can't quite bring ourselves to list them on ebay starting at £10 knowing that they will probably go for £50 on a good day, and these are not items of technology or anything that dates at all, they are just unfashionable brands, or brands that sell well in certain business models but not in ours. At times the money we tied up in these items would have been very welcome indeed in the business to pay suppliers or buy items we actually do sell!

In short, make sure the ground is solid under your feet before taking further steps, and then only take small steps. Anything more is a gamble.