Business loans for small business

bananah

Hi,
I'm looking for a loan for my business, and having been turned down by my bank, I wondered if there are any good alternatives out there.

A Google search brings up a myriad of options, but i would rather have some guidance from anyone with experience in this field.

We're a design business, trading over 7 years, turning over about 650k per annum. Looking to cut costs where I can, but we have hit a low patch with sales and had a client pull some budgets at the last minute, so I need to support my cash flow for 2-3 months.

If anyone can point me to a good option. I myself have a bad credit rating, which is what turned the bank off!

Thanks

somethingcorporate

Have you considered factoring? it's expensive but will bring money in quicker.

Tixy

Do you have any existing business facilities with your current bank (such as an overdraft)?

What is your projected shortfall / how much were you looking to borrow?
If the shortfall is just for 2-3 months then did you speak to your bank manager about alternative shorter term solutions - such as an overdraft?

As somethingcorporate suggests factoring may be an option, particularly if your customers take a while to pay.

An alternative may be to try approaching another bank for the funding and to switch your business banking.

Any equipment/plant you could borrow against (again not a cheap option).

Caz3121

did you manage to sort something out when you had the same problem last year
https://forums.moneysavingexpert.com/discussion/4908010

jonesMUFCforever

A business loan for expansion - sure why not especially if it makes bigger profits.
A business loan for working capital - a no no it might be throwing good money after bad.

CKhalvashi

Tixy wrote: »

An alternative may be to try approaching another bank for the funding and to switch your business banking.

This would be the first thing I'd think about doing, and it's ultimately a case of playing one bank off against the other with this.

Any equipment/plant you could borrow against (again not a cheap option).

It can be cheap at the right interest rate/valuation, but this is something that will often be argued on and maybe won't work so much in your favour.

Advertising budgets get cut frequently for us, and this needs to be something that is looked at over the course of the company.

How long do you think it will take to rebound is the ultimate question, perhaps leaving some time just incase the figures aren't completely correct here. You know your business better than anyone, so when we have this info, we can look further at the options for you.

dealer_wins

kiarabasu wrote: »

Thanx for giving such useful information
I want to start my own business and I need capital

Here you go, have some free SPAM as well. :spam:

bananah

Hi everyone,
Thanks so much for the responses.

I thought I had subscribed to my own post, but clearly forgot to.

Im going to try and answer each post if I can.
1. somethingcorporate - factoring is something I have looked into before, but we don't need it. Our debtor position is actually very good and our customers pay well, on time.

2. Tixy - we have been turned down for an overdraft due to my credit history. We have no other borrowings. We have always tried to run the business without credit.
I have considered switching to another lender so may look into this more closely.

3. Caz3121 - I had forgotten I had posted this! Interestingly, it does seem to be an ongoing issue. Which does make me realise its more about the business as a whole.

4. jonesMUFCforever - yes, I think you're right

5. CKhalvashi - we don't have any equipment we could loan against.

I have taken advice from a business mentor and am trying to work through the problem. Putting some big plans in place to fundamentally change the business.

thanks again for your advice and input, lets hope I dont come back next year with the same question!!

carollbert

The good news is there are alternative funding programs and solutions providing business owners the opportunity to obtain a business loan or line of credit regardless of having bad personal credit. Instead, other factors are taken into consideration such as bank deposit history, credit card sales, credit partners and other data sources.a merchant cash advance, provides businesses with upfront cash in exchange for a portion of future credit card sales. For businesses that have regular monthly credit card sales but struggle with bad personal credit, a merchant cash advance may be a viable option.However, be very selective on what merchant cash advance provider you select. Some providers can cost as high as 38% while others can be as low as 12%. In addition, when it comes to repayment, the majority of merchant cash providers take a fixed percentage of your daily credit card receipt volume until the advance you took is paid back. Other business cash advance providers may offer a fixed monthly installment payment for its repayment method.