Startup Business Loan

bammers80

Hi all, this has probably been asked a few times on here already but I was hoping to get some advice if possible (although I think I know what is going to be said).

I am wanting to start my own Mobile Auto Valeting and Detailing business however I am finding it difficult to raise the finance. I recently lost my job and have decided to go for it if the funds become available.

Due to not having the best credit rating in the world (a few defaults and a CCJ) I am unable to go to the high street banks. I have tried my local Startup Loans Company delivery partner and, although everything you read online says they won't base their decision on your credit, they turned me down before even looking at anything else I have prepared. I have asked family and friends but no-one has any spare money at the moment. I have looked into crowdfunding but from what I have seen it would not be the right medium to use.

I have already got a business plan and cashflow forecast ready and have a few personal jobs lined up and also a possible business contract but they do not want to commit to anything until the business is up and running.

I have worked in the industry both professionally and personally for over 12 years including managing and running a business similar to this but mainly at a static site and not mobile. Due to my management experience I am very familiar with how these businesses work and so I am more than capable of doing my own accounts etc.

The loan amount would be £15k which would include the purchase of a used van, the equipment necessary to be totally self sufficient when at a customers premises (it wouldn't be right to turn up to do a job and then ask to use their water and electric), the equipment would be purchased new as I would want to make sure I had some sort of warranty with it. It also includes the cost of a full years motor trade, public liability and equipment insurance.

If I owned my own home instead of renting I would be more than happy to put that up as collateral or remortgage as I know I can and will make a success of it.

Sorry for going on but I wanted to cover everything possible to give you an idea of where I am at.

I look forward to hearing your replies and thank you in advance for any advice given (even if it is what I don't want to hear)

Nick

foxy-stoat

Only thing I would do is try and start up for half that figure and fund it yourself with credit cards/small personal loan.

Do you need to drop £15K straight away? Cheaper van, secondhand equipment and pay your insurance by direct debit, maybe the equipment can be purchased on installments.

bammers80

Hi foxy-stoat

A cheaper van is an option but would prefer not to buy secondhand equipment due to the risk of it breaking down or not working properly and then having to go out and buy again. With new equipment I would get a warranty and if anything goes wrong with it I would be able to get it replaced/repaired without it costing anymore.

The insurance could be paid off in installments so yes I could reduce the amount needed again but as I have said my credit rating is against me if I wanted to get the equipment on finance. There is also the cost of the valeting supplies which I would have to pay for upfront.

Candyapple

Princes Trust any good to you?
https://www.princes-trust.org.uk/


Failing that, you seem to have explored all the other avenues so I think your last option would be to find a job, any job, and just work/save up as much as you can in the meantime to put towards your business.

bammers80

Hi Candyapple, thanks for the reply, I'm 35 so the Princes Trust is no go.

SeanG79

Probably not what you want to hear, but if you do not qualify for equipment finance, you're unlikely to qualify for a business loan either. Being a tenant with unsatisfied defaults and CCJ, with a new start business you are extremely high risk and have almost no positives other than industry experience as an employee.

The only loan facility that will most likely be available is a guarantor loan, but this would not be anywhere near the £15k and more likely nearer to £5k, and considering your track record repaying credit, I would suggest against this option.

As mentioned by a prev poster, you will likely need to try to find a job and save up to start the business.

bearcat16

Don't forget you will also need to pay yourself a "wage" out of the initial funding while you build up a customer base.

If I were in your shoes (and I have been) I'd forget about 'business' finance, as it is near impossible to get for new-starts. Your only real option is personal finance.

The sticklers will say that applying for a personal loan and then using it to start a business is fraud, as you'll have to put the purpose of the loan as 'new car' or whatever, which will be a lie. Probably they re correct, but it would not stop me from doing it.

Your credit history will be a real problem though, usual forms of lending will be unavailable to you. Perhaps ask your partner to apply in their name?

If that isn't an option, you'll have to save up. Second-hand equipment may not be ideal, but beggars can't be choosers and all that. Get what you can to get you up and running and look to upgrade later.

Good luck with it, it takes guts to strike out in your own, but the rewards of being your own boss are well worth it.

poppasmurf_bewdley

I find £15k to start up a car valet business quite on the large side.

Could you show your costings so that we could seem what you are proposing?

MEM62

With most start-up loans of this nature a proper business plan is needed in addition to which you will usually be expected to put up half the start-up cost yourself.

Basically, in order to persuade financial institutions to risk their money you need to be prepared to risk your own.

In your situation I appreciate that this is difficult so your options are limited. Maybe you will even have to borrow from different sources to get the total amount together.

As already suggested, why not post details of your business plan, cash flow forecast and your start-up costs.