I need some advice on getting a loan

j1980

HI.

I am looking to acquire a loan of 25000 to fund a business start up. My credit isn't awful but isn't great and I want to secure it against a house that is free of mortgage. It is in my name after being transferred to me from my parents. My mother is happy to do it or me and her history is better than mine but I'm not sure how it works on who can get the secured loan, is it me or my mother? Also when i do the eligibility test for both me and my mother it says no chance..... But yet the house is worth 100k plus and there is no outstanding mortgage on it.

What is the best way forwards? Thank you

[Deleted User]

You'll need to put together a business plan and approach a lender. You can't just apply for a personal loan.

j1980

Can i not apply for a secured loan?

[Deleted User]

The lender may ultimately want to secure it on your home, but they will want to see the business plan, including how much you are putting into the business yourself.

uncreative

Starting up a business with secured funds on your home is a double edged sword. Your income from which to repay the secured loan is determined by the success of the business, so if it doesn't work out you have no income and a cal on your home. This is not really advisable.

Are you going to be setting up in business via a limited company?

You shoudl really talk to an accountant as soon as possible. There are a number of loan schemes and grants for startups, be that for IT, training, help towards employee costs, rent, website costs. Depending on what line of business you are going into, if you structure it properly you should be able to fund the startup in a ltd company without risking your home directly by securing loans against it.

Make sure you get fee free business banking etc as well in yoru first couple of years.

You need a solid business plan too, so many businesses fail because they dont get the right advice pre-startup.

Have a look at Business Link or Business Gateway.

j1980

Thank you. I feel I should have been clearer, the business is ltd and is a year old. We are looking for growth finance and just wondered how it worked in terms of equity loans with the situation as I mentioned. I'm not looking for start up advice but I wasn't clear on that. Thank you.

BrassicWoman

loans are given against income, not security. The securty is there to balance the risk.

What net profit are you making?

What other funding options do you have - investor, factoring, leasing equipment not buying it, and so on?

Can you sell the house to self fund?

foxy-stoat

Try your bank who you bank with for your business - or Dragons Den!