Start Up Business Loan

Equinebusiness2015

I have wanted to run my own livery yard/competition yard formany years now. I have owned and ridden horses for over 25 years and have a lotof experience in the running of such yards. The trouble is these yards do notcome up for sale very often at all and obviously come with a high price tag.After looking in my local area for years one has finally come up however it is£875,000. This is very good value for most of the properties near me as theyare in the £2m region. It is being sold this cheap as the couple are retiringand moving out of the area.



It is a profitable business with a net profit of around£2.5k each month. This is after a wages bill of £8k a month to staff members. Iwould not have the staff members as it would be family run. The couple do nomarketing for the yard and have lower than the market prices as they have notraised their prices for over 10 years. They admit, the yard was a side projectand so have not done much with it. The potential for expansion and profit isgood.



I want to know, what is the likelihood of me being able to get a loan to cover the cost ofthe property? I have a house which I would sell but there is probably onlyabout £50k equity in it. I have the experience and the business makes enoughprofit without any marketing or effort. I want to get further information fromthe yard but I don’t want to go if this is an impossibility.



Any ideas on where I should go from here would be helpful.Thank J

[Deleted User]

you will obviously need to get a business loan from a bank,they will want to see you investing a lot of your own money into this so 50k may not be enough,they will also want to see a very detailed business plan and they will need to see at least 3 years of accounts from the business
i suspect that you will have 2 hurdles(no pun intended)raising enough of your own capital and convincing a bank to lend you what would be a lot of money
good luck

bris

You will need between 30 and 50% before the banks will look at you seriously, sorry but 50k doesn't even come close.

jonesMUFCforever

..........and getting rid of the staff who have worked loyally for the business to be replaced by family will be great PR in the locality.

CLAPTON

to fund a loan of 825,000 at 5% the interest alone would be 41,250 pa or 3,438 per month

at 10% is would be 82,500 pa or 6,876 per month

that is without repaying any capital and assuming you didn't need any working capital


you need a proper business plan

27col

You have been wanting to own and run your own livery business for years but appear to have made absolutely no effort to save any money towards achieving that goal.
I can't see anyone being interested in a deal like that. Why would a lender risk their money if they see that you are not risking any of your own

ViolaLass

The couple who own it want to retire and are therefore selling it for half the cost of nearby liveries? If that makes it cheap, I would be asking more questions about why.

SeanG79

Equinebusiness2015 wrote: »

I have wanted to run my own livery yard/competition yard formany years now. I have owned and ridden horses for over 25 years and have a lotof experience in the running of such yards. The trouble is these yards do notcome up for sale very often at all and obviously come with a high price tag.After looking in my local area for years one has finally come up however it is£875,000. This is very good value for most of the properties near me as theyare in the £2m region. It is being sold this cheap as the couple are retiringand moving out of the area.



It is a profitable business with a net profit of around£2.5k each month. This is after a wages bill of £8k a month to staff members. Iwould not have the staff members as it would be family run. The couple do nomarketing for the yard and have lower than the market prices as they have notraised their prices for over 10 years. They admit, the yard was a side projectand so have not done much with it. The potential for expansion and profit isgood.



I want to know, what is the likelihood of me being able to get a loan to cover the cost ofthe property? I have a house which I would sell but there is probably onlyabout £50k equity in it. I have the experience and the business makes enoughprofit without any marketing or effort. I want to get further information fromthe yard but I don’t want to go if this is an impossibility.



Any ideas on where I should go from here would be helpful.Thank J

£2.5k profit a month from a £875k investment is negligible, with only £50k of your own money to put down the chances are slim to none.

However if your current property was 700k, with a £650k mortgage, you may have a chance...more information is required.

Oh and no one sells a business or house for half of what its worth just to retire. If it sounds too good to be true, it usually is...

MEM62

Equinebusiness2015 wrote: »

I have wanted to run my own livery yard/competition yard formany years now. I have owned and ridden horses for over 25 years and have a lotof experience in the running of such yards. The trouble is these yards do notcome up for sale very often at all and obviously come with a high price tag.After looking in my local area for years one has finally come up however it is£875,000. This is very good value for most of the properties near me as theyare in the £2m region. It is being sold this cheap as the couple are retiringand moving out of the area.


You have to ask why this is so cheap. Retiring and moving out of the area is a very poor reason to sell property for less than the market value. Perhaps either the land or business has problems that you are not being made aware of.

It is a profitable business with a net profit of around£2.5k each month. This is after a wages bill of £8k a month to staff members. Has an accountant confirmed this or is this just your opinion based on what you are being told by the vendor? I would not have the staff members as it would be family run. So you will make the current staff redundant - have you factored this cost into your financial plan? Also, will your family earn nothing? Of course not - you will have costs here. The couple do nomarketing for the yard and have lower than the market prices as they have notraised their prices for over 10 years. They admit, the yard was a side projectand so have not done much with it. The potential for expansion and profit is good. You'll need a proper business plan to demonstrate this to any bank lending you the money.

I want to know, what is the likelihood of me being able to get a loan to cover the cost ofthe property? I have a house which I would sell but there is probably onlyabout £50k equity in it. I have the experience and the business makes enoughprofit without any marketing or effort. I want to get further information fromthe yard but I don’t want to go if this is an impossibility.


Unfortunately, it is unlikely that the bank will lend if you are only prepared to put £50K of your money into the business and expect them to risk £825K of theirs. You will need to be able top put up at least 50% of the capital. And what about initial cash flow for your operating expenses? Have you considered how you would fund this?


Its a lovely idea but, based on the information you have provided, I just don't think you can finance it. Any chance you can find a private backer or silent partner willing to take the risk?


Any ideas on where I should go from here would be helpful.Thank J

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