Small Business loan with bad credit??

bananah

Hi,
I co-own a small business, employing 10 people and turning over about £650k.

We have some cash flow issues, and are looking for a small loan (£50k) or overdraft.

The main issue is that I have a very poor credit history, due to my last business going bust after 3 clients went under. I was forced to try and keep the business afloat and lost a lot of money, and subsequently sold my house to pay off debts.

Every time we apply for a loan or overdraft we get refused. We have a good trading history, since 2008. We have never had a loan or overdraft, and have never had any bad credit against us.

Is there a way around this? Does anyone know of lenders who can provide lending to small business, who wont look at director's history or will lend on bad credit?

thanks

imoneyop

Do you have security that you can provide? No lender in their right mind is gong to hand over £50k to a business that is in financial difficulty.

bananah

No security as such. The only thing I think we could offer is my co-director giving a guarantee, as he owns his own home. We have £60k of debtors, plus another £175k already confirmed for the year.

If you're right, then I guess we shouldn't waste any more time on looking or applying.

somethingcorporate

Agree with imoneyop, unless you can provide security no sensible bank is going to touch you. I deal with a number of small businesses (£1-2m turnover) and even with ten years trading profitably they struggle to get that level of financing without putting their houses on the line.

poppasmurf_bewdley

bananah wrote: »

Hi,
I co-own a small business, employing 10 people and turning over about £650k.

We have some cash flow issues, and are looking for a small loan (£50k) or overdraft.

The main issue is that I have a very poor credit history, due to my last business going bust after 3 clients went under. I was forced to try and keep the business afloat and lost a lot of money, and subsequently sold my house to pay off debts.

Every time we apply for a loan or overdraft we get refused. We have a good trading history, since 2008. We have never had a loan or overdraft, and have never had any bad credit against us.

Is there a way around this? Does anyone know of lenders who can provide lending to small business, who wont look at director's history or will lend on bad credit?

thanks

The first thing you need to do is change your attitude to the value of money.

In no way is a loan of £50k a small amount. It is a very large amount, and there is very little chance of a bank lending this to someone with a poor credit history.

bigadaj

H ve you looked at factoring?

somethingcorporate

bigadaj wrote: »

H ve you looked at factoring?

This did cross my mind to suggest this but the issue with factoring is it just pushes the problem further out, still, if it stops them closing their doors today then it's preferable.

Brock_and_Roll

If it is JUST a cashflow i.e. a timing issue then why would factoring "push the problem further out"? you would recieve say 85% of what you are owed day 1 with the rest when the debtor pays. Or is there a wider viability issue with the business?

jonesMUFCforever

Have you got audited accounts for the last 3 years - what do they show?