Extra Borrowing for Business Start-up?

dumdum_mum

Hello all

My husband needs £10k for a business start-up. After looking at other options, we've decided to borrow from Natwest and add it to our mortgage - 6.59%, but it can be paid back sooner than rest of mortgage, according to their website. He's looking to repay it in the first year.

We've got approx £90K equity in the property (worth approx £150K) and the mortgage is in my name only (I could afford the new repayments without my husbands salary in theory).

Do you think they'll lend the money for a business venture or should I say it's for a car or home improvements??!! (I'm not usually dishonest - but it's not a vast amount of cash....is it?)

Any advice would be gratefully received. Thanks very much!

UK007BullDog

Do you know that most business startup fail within their first 3 years?

You can do it but do not say what it is for business. Can he not get a personal loan? That is unsecured and will be his debt, not yours.

I think for extra borrowing with Natwest you need to borrow at least £15K.

What might be a small loan to you is a huge one for others and peanuts for others again. You need to be comfortable with it and be able to pay it back on your own.

dumdum_mum

Hi, thanks for your reply.

Yes we are very aware of that fact, sadly.
I don't want to go into details, but they've got a solid business plan and the decision has not been taken lightly.
Also, I didn't mean to sound glib about £10k not being alot of cash. Of course it IS - a massive amount, but I meant relative to business start-up costs.
We have borrowed this amount before from NW for home improvements, so didn't think it would be a problem, things must have changed in the last few years.

I appreciate what you're saying about secured debt versus a personal loan. It was a way of "spreading the cost" if you like, extending the mortgage by a few years and hopefully being able to absorb the cost of the extra loan, without having to shell out an extra £200 or a month for personal loan repayments......Though I know my hard work of cutting down the yers on the mortgage will be undone if we extend it and pay more in interest long term....

Plus I was led to believe that for a business loan, you need to be able to put up at least half of what you're asking before they even consider it, which is not an option for us.
Still thanks for your help, much appreciated.