Business overdraft

stevetuk

We've been trading as a sole trader entity for 18 months and then as a limited company (after transferring the business) for 6 months.

Turnover ~60k and we're making (a very small) profit.

We bank with Santander, and have an agreed overdraft facility of 5k. We want to extend this to 10k to expand the business into new premises (so initial outlay). They've turned down the application.

I did an eligibility check on NatWest too and they turned it down.

Can anyone advise where we might find some short-term funding for fitting out new premises and new equipment etc without taking out a business loan?

Or any other advice much appreciated!

Pennywise

You'd be better to get a personal loan and then just put the money into your company as a director's loan. Banks are very unwilling to lend to businesses these days yet continue to seem happy to lend to individuals.

motorguy

Pennywise wrote: »

You'd be better to get a personal loan and then just put the money into your company as a director's loan. Banks are very unwilling to lend to businesses these days yet continue to seem happy to lend to individuals.

+1

Thats what i'd be doing.

stevetuk

Ok, thanks for the tips. I've also spotted start up loans which are unsecured business loans backed by the government so that might be another option for us.

Appreciate the advice, thank you

Pennywise

stevetuk wrote: »

Ok, thanks for the tips. I've also spotted start up loans which are unsecured business loans backed by the government so that might be another option for us.

Appreciate the advice, thank you

The govt backed loans still usually require security and they are usually more costly in terms of arrangement/set up fees and higher interest rates.

stevetuk

Pennywise wrote: »

The govt backed loans still usually require security and they are usually more costly in terms of arrangement/set up fees and higher interest rates.

Ah, ok, I'll do some comparisons of those vs personal loans then. I was hoping not to have to put more capital down myself!

paddyrg

For you to benefit from the extra cash, you need to carry that risk in one way or another, even a business overdraft will require a personal guarantee. Best to find a loan (don't forget to try peer lending like ratesetter which you can pay back early too) you can invest directly.