Small biz start-up loan ?

rail.link

Hi,

A friend is planning to takeover a barber's business and needs a loan of about £16,000 for the existing fixtures & fittings, etc.

What's the best deal on offer ? Any other pointers would also be much appreciated.

Mark7799

1. Has he/she prepared a business plan - this will be essential for any business finance application.
2. Are they asking for 110% finance or are they putting in some of their own money - hint, the more they can put in, the more likely a bank is to lend the rest.

COOLTRIKERCHICK

does the business that you friend is buying......worth the money ? and would the turnover/profit be able to cope with the running costs and an additional monthly payment for the loan?

prob.. your friend has worked this out...... but please bear in mind that... most people goe to hairdressers/ barbers....for the stylist etc....and when there is a new owner/hairdresser, there could be a dip in the turnover....for a while....

dont want to be a party pooper, but when weighing everything up....about the business affording to pay a loan back..... please bear this in mind.....

rail.link

Mark7799 wrote: »

1. Has he/she prepared a business plan - this will be essential for any business finance application.
2. Are they asking for 110% finance or are they putting in some of their own money - hint, the more they can put in, the more likely a bank is to lend the rest.

Thanks !

Yes, he's got the business plan done.

I'll have to speak to him to see how much he can put in.

rail.link

COOLTRIKERCHICK wrote: »

does the business that you friend is buying......worth the money ? and would the turnover/profit be able to cope with the running costs and an additional monthly payment for the loan?

prob.. your friend has worked this out...... but please bear in mind that... most people goe to hairdressers/ barbers....for the stylist etc....and when there is a new owner/hairdresser, there could be a dip in the turnover....for a while....

dont want to be a party pooper, but when weighing everything up....about the business affording to pay a loan back..... please bear this in mind.....

Thanks !

There is an established customer base and he's done the figure-work. The affordability of the loan repayments would, obviously, depend on the interest rate, but he's looking at around £400 per month as being manageable for the time being.

COOLTRIKERCHICK

rail.link wrote: »

Thanks !

he's looking at around £400 per month as being manageable for the time being.

being affordable for the time being ?

also could he not have a personal loan which will prob be cheaper interest rate....?

rail.link

COOLTRIKERCHICK wrote: »

being affordable for the time being ?

also could he not have a personal loan which will prob be cheaper interest rate....?

A personal loan would be better, but he's currently not in employment, having decided he want's to work for himself. I really don't know what his chances of getting a personal loan would be ?

COOLTRIKERCHICK

rail.link wrote: »

A personal loan would be better, but he's currently not in employment, having decided he want's to work for himself. I really don't know what his chances of getting a personal loan would be ?

oh...ok..... mmmmm if he is going to apply for a business loan..... in general they do ask what he will be putting into the business....so basically they want to see some sort of finacial commitment from the business owner...

when i opened a business account..i wanted an overdraft fecility.. of a £1000. this is purley for cash flow..... ease..... but i still had to show and explain to the bank how much i had allready put into my business... as in assets.....stock....etc.... my business premises are rented......so no commitment as such there...

depending on the bank... and the potential risk....... they might want the loan to be secured on his house....


i have seen it amny times... businesses are fantastic on paper, cash flow ..projected forcasting etc.... but in real terms....its no where near...

hope your friend can sort something out......without being over- loaded so to speak...


edit........ also with him not currently employed he may well struggle with even getting a busienss loan....

rail.link

Thanks for your input.
Much appreciated.