Do you think i will have Affordability Problems?

Moneysaverchris

Hi all need to borrow money to start my own business i already have a large chuck of hard earned cash (£80,000) need another £15k as a loan spoke to my bank and said i could use a personal loan for business either way that is irrelevant.
Do you think i could borrow an £12-15k ?

Current earnings £33000

Debts -
£6000k personal loan. (overpaying fast)
Santander card £2100 - £0 balance
natwest card £1500 - £0 balance
cap one card £1200 - £0 balance
natwest overdraft £1200 - £0 balance

Spotless credit tones of settled accounts and ones that are years old.

will i fail on affordability and what can i do to prevent that?

gb12345

I am surprised that your bank said that you can use a personal loan to fund the business as that is not usually allowed.

Affordability wise, a rule of thumb is that lender's will not usually go over 50% of salary, so that yould be £16.5k in your case - but they will take into account all existing credit that is available to you - which you have a lot of, so it's not looking good.

Tixy

I am surprised the bank said it was ok to use a personal loan for business purposes. I would definitely double check that with them, or make sure you clearly state the purpose on the application.

Are you current earnings from an employed position that you will give up when you start your own business? If so then again I would imagine the bank will have a problem with that.

will i fail on affordability

All that aside - I would imagine you may struggle on affordability.

It would probably be best to stop over paying the £6k loan and add that money towards your savings.

and what can i do to prevent that?

What will the £95k be used for? if there are assets within that perhaps you could look at business asset financing to try to borrow the remainder of the funds you need.

jonesMUFCforever

Hmmn bankers chasing points targets seems to be the case here.

A business loan might be cheaper as well.
Ask to see a business manager before taking up any personal loan.

Moneysaverchris

Thanks for the replies. santander also raised my credit card limit today to 8k. that will not help!!!

jonesMUFCforever

Moneysaverchris wrote: »

Thanks for the replies. santander also raised my credit card limit today to 8k. that will not help!!!

You do not have to accept any limit increase.