£67,031.92 is a frightening number indeed....

GlendaSugarbean

Is it worth threatening to go to the media unless they compromise? If more people knew about their shady business practices then their (v dodgy sounding) business model would collapse.

Silver_Queen

My two cents, if they have put it in writing that you'll be able to leave without penalty, I think that you can rely on that to force them, or at least come to a reasonable compromise with them.

I don't think that going to the media would be good for your reputation, it will cause a lot of companies to be wary about working with you in the future. If it were down to me, I would leave that bridge unburnt.

Treadingonplaymobil

It's tricky to enforce the written promises legally, because they are more generous than the contract terms, so it's a question of which one takes precedence (the contract, I assume, although will discuss with solicitor if they remain tricky). But given the choice of admitting they lied through their teeth or of backing down, I'm hoping they will see which one is the more sensible and pragmatic option. I am contractually very bound in terms of saying anything negative about them for at least 12 months, so going to the press isn't an option even if I wanted too. It's not really in my nature though.

It's feeling like a long time until the end of the month! Most of the everyday budget pots (food, family entertainment etc) are empty, so any unexpected spending over the next few days is going to either come out of savings pots of be on the CC. However, we have absolutely tons of food in the house, and enough in the diesel pot to fill the car up, so unless something unexpected crops up, we should actually be fine.

I had clients yesterday, have clients again tomorrow and a couple more booked in for February (since I patently wasn't going to be able to negotiate leaving the franchise by the end of Jan I have been taking bookings for Feb) so my salary pot for February and March should be ok. After that we're going to be on 'carrying' the new business, as expected (actually we expected to be carrying it from January, so it's had a little extra time to get established). I'm hoping it will make a tiny bit of turnover in March, although that will be entirely ploughed back into the business, and the next opportunity for revenue will be June (I'm releasing ebooks and products four times a year, the business has a really seasonal focus).

What else is going on? Oh, DH and I need to get our act together to sort the borrowing out for the extension. The mortgage broker is waiting on documents from us to extend our mortgage to the maximum LTV we can borrow, which will actually only release about £10k, but since it's the cheapest borrowing we have available we'll do that, along with the £20k from my mother, as a first step. Where the remaining £30-40k to finish the build off is going to come from is anyone's guess, but I'm really confidence we'll be able to borrow it then add it to the mortgage, and the turnover of my business will grow sufficiently next year that we'll be overpaying the mortgage by late 2020.

Sea_Shell

If you've maxed out your Mortgage LTV, what other options are there for the £30-£40k that you'll still need to borrow? Would you even be able to borrow this much as a unsecured personal loan, on your proveable incomes??

wishingthemortgaheaway

TOPM, you do take us on emotional rollercoasters....

Your explanations about the franchise issues shows your whole diary in a different light, your debt really isn't due to £50 washing up bowls and mass spending on children's clothes. (Although I'm sure that hasn't helped in places).

Then you exude confidence over your business venture, sounding very positive and confident.

A nearly £6k increase in your credit card debt still feels ok as it's investment in your business (not ideal way to fund a new business, but you have confidence and all is going well)
Your franchise negotiations are a pain, but again, you are confident all will be well.

Then.....
the financing for the extension.

£10k montage extension
£20k from the bank of mum
And an unknown £30-40k. I'm pleased you have confidence all will be week, because I would be rocking in the corner at this point.

A couple of genuine questions - not digs or wanting to get at you.

Does your mum think you have the £20k saved from the original money she lent you? So her ' 'new' £20k is adding to the 'old' £20k which along with the £10k mortgage upgrade means you have £50k towards the extension?

Once the extension is done, if you needed to move, for whatever reason, would the house value cover the mortgage owed? And the debts owed to companies? And the debt to the bank of mum?

I think you are amazing to do what you are doing with the confidence you have, but I would be a quivering wreck.

Wish.

Treadingonplaymobil

New week! Gearing up for a busy one - if I can keep everything on track this week it will be an absolute miracle, but equally if I can it will really put me ahead of the game with the business - gearing up for a launch of the new branding and look etc in February, then products in March. Expecting sloooowwwww growth so doubtful I'll be a millionaire by April.

Lots of DCs' commitments to weave in with the work this week too, which makes things even trickier.

Regarding funding the extra for the extension - we have around £30k available credit on CCs right now, if we wanted to spend it. Clearly that's not the preferred option, as we could end up in a real pickle with repayments. We are currently waiting for a final quote and timescale from the builder, which will give us a much clearer idea of what money we will need and when, which will help with the planning. If it's really unfeasible, the project naturally breaks down into three stages, so we do have the option of just doing the first two phases, which will give us the extra bedroom space, which is the key priority (hard to achieve that without doing both phase 1 and 2).

It's my hope/thought that if the build is starting in late May/early June, then the £20k from my mum and the £10k-ish from the remortgage will get us through until late summer, at which stage we'll take out a personal loan for £20k-ish (which google and our borrowing history suggests should be feasible, although my mum has offered to take it out if it and we'll pay her if it results in a better interest rate/terms). And then our fixed term mortgage expires next January, so around September/October we can look at remortgaging for the new house value (hopefully significantly increased, but who knows with Brexit) and that will free up the ability to finish it off. If we run out of money before it's done or the house value goes down, we'll just live without a kitchen for a bit longer, or we won't finish some of the spaces (like the second bathroom). Brexit has thrown things a tiny bit, as we've been banking on the house price increasing dramatically with the work being done, but if there's a massive crash that changes things. Hopefully that will become apparent in the coming months though.

Still waiting to hear from the franchise company. I feel like we're slightly playing power games now, which is a real shame - I have no axe to grind and am happy for them to feel they've 'won' in whatever way they need, I just want to get out of this whole thing and stop having it taking my energy. The small silver lining is that I'm now going to have to operate for February as well as it's too late to cancel my monthly fee, so I've got a couple of clients booked which will cover the monthly fee plus a little bit more - only a few quid, but it all helps at this stage.

DH got notified of a small payrise on Friday. Only the equivalent of about £35 a month after tax, but not to be sniffed at. It will be backdated to January and paid from February, so we'll get an extra little lump in February to go towards March's expenses, which will hopefully be the first month without the franchise income.

What else? Just ticking along here. I've worked for the last 14 days on the trot and I'm a bit tired now, which I'm slightly irritated about as I'm trying to take it slower this year, but I need to keep going on the new business stuff, and I've had client bookings on the weekends because I've put the word out about stopping. Next weekend should be pretty quiet though.

Sea_Shell

What are the APR's on your credit cards? £30,000 at say 19% APR would mean interest payments alone of £475 per month (if I've got my sums right) and that's if you don't just make minimum payments...e.g. they may only require say 1% of the balance , £300. So then the next month you owe £30,175 and so on....they don't call it a debt spiral for nothing!!!

Please think long and hard before going down that route, and before you have guaranteed income from your new business. What surplus do you have for making re-payments, on your current incomes (not what you hope your income will be)

This is on top of maybe having to pay your mum back, at whatever interest rate she is able to obtain, as it does sound like she's willing to take out a loan for you, which is great, but she needs to be getting repaid for this this time, not on the never never.

Like you've said, you are making your own path....we all just hope it's the right one in the long term.

Good Luck

PositiveBalance

ToPM, I have alarm bells ringing all over the place at the idea of your mum borrowing money for you: if I have understood your situation correctly your mum does not know your existing debt levels and probably thinks that you have a lot more disposable income than you do. Additionally, you are still at the stage of leaving one business and growing another so you have no idea about what your income level will be.

If the pooh hit the fan would your mum be able to afford to make the repayments on your behalf?

If your mum does not fully know your current financial situation, you owe it to her to have a very frank conversation with her before she does anything like take out a loan for you. It could impact your relationship massively if anything goes wrong.

Treadingonplaymobil

Quick note - I'm on my phone. My mum doesn't know the debt situation, but does know our precise disposable income (she has no idea or interest in what DH earns) and has said she's happy to help out if necessary until the remortgage happens. She also knows I am starting the new business so have basically no meaningful income for the rest of the year. Her priority is her grandchildren and TBH I think she is indifferent to level and frequency of repayments of any money she loans us - it's my pride that insists on having it set.

Silver_Queen

Your mum sounds like an absolute treasure!