advice on business loan requested

city_knight

Hi!
We've been paying a 3rd party to do something that we could do in-house.
It costs us about £100 per week plus multiple 60 mile round trips!

Anyhow, we bank with Alliance & Leicester Commercial Bank and in the post yesterday we received the loan agreement for 8.9% APR to borrow £15k over 24 months. It's unsecured but backed by Director personal guarantees.

Their site is keen to push their "price match" attitude and to get businesses to transfer loans to them.

I intend to call them to negotiate the 8.9% and need some ammo for the phonecall! Where is currently cheapest for unsecured small business loans??

All advice appreciated, as would any links where I can find out myself!

Happy new Year everyone
Chris

jonesMUFCforever

It will not be unsecured then IMO.
Director personal guarantees are a worthless piece of paper unless backed up by real security ie a second charge on their house.

To negotiate a better rate the bank needs to see your audited acounts for the last 3 years to see what the financials are like. This is likely to be the only way to better the rate.

city_knight

Hi!
Phoned them and they are really un-negotaible!
I've already supplied accounts - this is the deal being offered to me. The loan agreement states the 2 directors as personal guarantors but does not require security against personal or business assets.
Where are people going for good rates on business loans?

jonesMUFCforever

What do you consider a good rate then?

You can't compare a personal loan at say 6.4% with a business loan to a limited company.

jonesMUFCforever

city_knight wrote: »

Hi!
Phoned them and they are really un-negotaible!
I've already supplied accounts - this is the deal being offered to me. The loan agreement states the 2 directors as personal guarantors but does not require security against personal or business assets.
Where are people going for good rates on business loans?

Why do they bother to take guarantees then?
This is why some so called banks (building societies in disguise) get into trouble when they don't know what they are doing.
They might as well get it written on bog paper if it's not supported - its worth nothing else!

city_knight

ejones999 wrote: »

What do you consider a good rate then?

You can't compare a personal loan at say 6.4% with a business loan to a limited company.

It's still money being lent to a legal entity for a period. Businesses generally pay more for banking services but since loan rates seem to be linked to risk, I was optimistic to get a rate comparable to the bestbuy personal loan.

jonesMUFCforever

Your limited company has no credit history and can never have one - you can; is there any reason why you cannot apply in a personal capacity to a bank and 'lend' the money to the company?

lonelylady11

[FONT=&quot]I have searched up Google "business grant" and was linked to IC Financial. They contacted me and said I was qualified to receive $80,000, but I must pay $479 up front for the application fee. Something doesn't smell just right and I am wondering if these guys are legit and am I being scammed. If anyone out there is familiar with IC Financial, or have had dealings with them - please let me know.

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