Who to talk to?

TexasChainstoreMascara

I would like to speak to somebody about starting a small engineering business. I won't go into business plan details but where is the best place to go for guidance and financial direction? (A small business loan would be required).

Are any of the high street banks preferable/recommended or is there a more independent route that is better for an initial meeting to gauge options?

TheTracker

TexasChainstoreMascara wrote: »

I would like to speak to somebody about starting a small engineering business. I won't go into business plan details but where is the best place to go for guidance and financial direction? (A small business loan would be required).

Are any of the high street banks preferable/recommended or is there a more independent route that is better for an initial meeting to gauge options?

Search engine: "Start Business"
First result: https://www.gov.uk/starting-up-a-business/start-with-an-idea

Pennywise

Don't waste your time with the High Street banks. They're not "business advisors" - all they want to do is arrange loans for people who have collateral and cross sell other services such as credit card processing, life insurance, debtor factoring, etc. You'll never get any real "business" advice as to whether or not it's viable etc. from them.

Lots of local authorities have a "business development" department through which they may offer grants, subsidies, etc., and there may be some advisors in a few areas available that can give good advice, but it's all very hit and miss, just like the old business link where some of the advisors were good, others were shockingly bad.

I'd say the first port of call would be an experienced accountant to help you review your business plan, prepare forecasts, etc. If you've done lots of leg work already, it shouldn't be a time consuming or expensive task for them to give your plans the once over. At the earliest stage, you just want a sanity check to make sure you've covered all your costings, factored in all the taxes, etc., which should highlight how much you need to borrow.

When you know what you need to borrow, then it's time to talk to finance brokers - there are plenty of specialist small firms who deal with small business financing day in, day out. There are often loans available through specialists that you can't get through the big banks, but obviously, being specialist in nature, they may cost more either in higher interest rates or up-front arrangement fees, especially if you're short on collateral. A decent broker will also be able to help arrange asset finance for buying the equipment.

A lot of the art is properly "matching" the finance to what it's financing, i.e. short term HP or lease for most equipment, longer term loan for goodwill or long lasting plant, and a secured loan (like a mortgage) for buying land or buildings.

Horace

Also speak to your local Chamber of Commerce as they give free advice on business plans etc.

Mistral001

My advice is to find out as much as you can without talking to anybody. Why? Because as a business person or even a prospective business person you cannot come across to anybody as needy in connection with your business. Most people as Pennywise has mentioned want something from startups. An accountant might give you some pointers as Pennywise has said, but probably only if he/she knows that there is a chance that you will grow the business and become a good client. Mine helped me and as it turned out he was not wrong in what he said.

Savvy_Sue

How small a loan, and what % of the startup costs? What are YOU bringing to the party?

If the answer is 'not a lot', then don't expect to be able to borrow much, if anything.