Business Hire Purchase Loan help

Step_Morr1983 · 17 July 2018 at 12:19PM

Good afternoon all,

Firstly sorry if I have put this in the wrong place and pardon the essay.

Secondly I really need some help and advice.
I took out a guarantor HPA about 4 months to start my business up. I am in the process of selling my house so thought I would put some money towatds paying the debt.

The initial loan amount was £20k over 40 months at 50% (high I know but best rate by a mile at the time) Plus a ‘management fee’ which is at 10%. The £900 a month is bad enough, and earning little over £150 a month with the business (i do have other income) isnt enough.

So I thought I would pay £16k towards it. I got quoted £34k to close the account and even with paying off £16k it lowers the monthly to £450 but apparently they cannot lower the interest and I have to pay it all back (so the full £10k) regardless of the lump sum payment.

I dont want to land my guarantor with any debt as he has had his own bad news over the last couple of weeks and I thought I could clear a mjority of it.

Is there anything I can do? I am a tad bit worried as all I want to do is get rid of the HPA so that I can move foward.

Thank you.

[Deleted User] · 17 July 2018 at 12:23PM

You won't need to pay back the full interest, as you have lowered the capital.

If you maintained the normal monthly payments after the lump sum, you will clear the debt much sooner.

Clive_Woody · 17 July 2018 at 2:14PM

Step_Morr1983 wrote: »

Good afternoon all,

Firstly sorry if I have put this in the wrong place and pardon the essay.

Secondly I really need some help and advice.
I took out a guarantor HPA about 4 months to start my business up. I am in the process of selling my house so thought I would put some money towatds paying the debt.

The initial loan amount was £20k over 40 months at 50% (high I know but best rate by a mile at the time) Plus a ‘management fee’ which is at 10%. The £900 a month is bad enough, and earning little over £150 a month with the business (i do have other income) isnt enough.

So I thought I would pay £16k towards it. I got quoted £34k to close the account and even with paying off £16k it lowers the monthly to £450 but apparently they cannot lower the interest and I have to pay it all back (so the full £10k) regardless of the lump sum payment.

I dont want to land my guarantor with any debt as he has had his own bad news over the last couple of weeks and I thought I could clear a mjority of it.

Is there anything I can do? I am a tad bit worried as all I want to do is get rid of the HPA so that I can move foward.

Thank you.

If the interest is 50% APR over 40 months then the total interest will be over £10,000

£900 per month for 40 month is a total repayment of £36,000

As mentioned if you make a partial repayment of the balance then the total interest charged will be less.

jonesMUFCforever · 17 July 2018 at 7:02PM

annagreen222 wrote: »

You need private lenders help, I know few lenders who can help.
Merchant Cash Advance
Funding Circle

Are you in any way associated with these lenders?

Nearlyold · 17 July 2018 at 8:07PM

jonesMUFCforever wrote: »

Are you in any way associated with these lenders?

I did wonder if anna was also the OP as the original post does seem a little implausible, a £20,000 loan for a business that produces £150 pm income. If it's a Hire Purchase what is the asset it has been used to purchase? All seems to be a bit odd to me?

Step_Morr1983 · 17 July 2018 at 8:26PM

Because I was hoping to be earning much more, but it hasnt been as easy as I thought due to local councils changing the way they employ contractors.
It has been alot slower than hoped as trying to out bid work from india/pakistan on freelancer as well hasnt been easy.
I have invested in software and hardware and have been lent money based on my business plan. I do work another job as my business is a new start up.

Step_Morr1983 · 17 July 2018 at 8:34PM

Deleted_User wrote: »

You won't need to pay back the full interest, as you have lowered the capital.

If you maintained the normal monthly payments after the lump sum, you will clear the debt much sooner.

I was hoping to keep it the same, however there is no chance. I bit off more than I could chew, panicked and now have got myself into a small pickle.
Apparently I 'must' pay back the full amount of interest. I cannot find it in the paper work. The management fees are a pain but I have agreed that these must still be paid.
I do feel quite silly.

dealer_wins · 17 July 2018 at 9:38PM

Wow your guarantor must have brown briefs!!

Step_Morr1983 · 17 July 2018 at 10:04PM

dealer_wins wrote: »

Wow your guarantor must have brown briefs!!

He does, but it doesnt answer the question of is there anything I can do to lower the interest or lessen my monetary pain.

All of this does make one wonder why does anyone go into business and I can see why so many fail when there is little to no help other than sharks.

[Deleted User] · 18 July 2018 at 7:01AM

Sorry to hear this.

Starting up your own business requires many, many years of building it up to a success, it's definitely not something that happens within a few years.

I am now comfortably off, it was tough in the early years but I knew I could do it.

I hope you find some solutions and can get yourself back on track again.

Business Hire Purchase Loan help

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