£25k loan needed please help

wellywells · 9 January 2008 at 6:42PM

Hi guys I really need some help, basically I need £25k to buy a franchise. Now I know strictly speaking that loans are not for business purposes but its a lot simpler. So I have been told to apply for a home improvement loan.

SO I would like to know which loan companies would be more likely to lend or have a high acceptance
my situation is below, I have been declined once so dont want to apply to loads of places and ruin my credit. I also have a clean credit history

I applied with asda for £25k as it had a low 6.9% rate, but they declined me.
However I checked my experian credit score and it says I am good with a score of 949
And I also cheked call credit which said again a good credit rating with a score of about 1250 so I am a little confused.

I earn on average 45k a year as i am self employed, however if I do this franchise I will earn £85k a year and upwards??

To give you an idea of my financial commitments, I have a loan of £7500 with natwest which has about £6500 outstanding
I also have a truck on hp which was for 12500 but shows as £15k outstanding i put 12500 down, this has been sold and I am waiting for the buyers money to come which should be in the next week. Would this make a difference if this is gone?? and this is paid off

I also have a barclaycard platinum with 2400 on it
and a Natwest credit card with 1000
an MBNA card with 1000
and a citi card with 700
I also have 3 other credit cards but all have a 0 balance

I hope someone can point me in the right direction, i look forward to your replies

Rafter · 9 January 2008 at 7:33PM

I think you will fail the credit score of most loan companies unfortunately:1. You are self employed2. You already have £25k of debt including the HP on the truckMy only suggestion is that you try to raise the £25k through a combination of a smaller loan and a number of 0% credit cards. R.

wellywells · 9 January 2008 at 7:46PM

but please bear in mind that the truck finance will be cleared within the next week so all ill be left with is the natwest loan and credit cards. I also have a mortgage aswell.

So would I be more likely to get say 2 £12500 loans or is that harder than getting just one £25k??

chriz1000 · 9 January 2008 at 8:29PM

A lot of people will disagree with me, but if I really needed the money I would personally apply for all the loans on the same day, even if I got rejected I would just apply for another one.
Your credit file doesn’t update instantly so as long as you applied for them all on the same day you are a lot more likely to be accepted. Just be aware that your credit rating will be messed up for the next 6 months to a year as it will show lots of searches.
Do your research with regards to the brands you apply for a loan with, as a lot of them are in-fact the same company.

Are you sure this franchise is sound too? You have to question why anyone would sell a franchise where £75,000+ profit per annum is possible from £25,000 initial investment. Why wouldn’t they just employ staff and keep the higher profits? I have several businesses and among them I own a couple of franchises, I see a return of approximately 40% profit on my investment PA and that is pretty good. However I know a few people who have been totally screwed over by unrealistic figures.

Mark7799 · 9 January 2008 at 9:35PM

Do a business plan and go for a business loan.

For a project of this size it is worth doing properly rather than trying to cut corners.

Consider the Small Firms Loan Guarantee as another option.

wellywells · 10 January 2008 at 10:06AM

I kind of see your point about appyling for loads of loans but not 100% sure thats the best way to go?? As I dont really want to wreck my credit history and potenially end up with no loans whatsoever??

Yes I believe the franchise to be a sound investment. I can only assume that they have decided to franchise the business for a few reasons, one being it is the quickest way to speread across the country, the other being it brings in investment to the company by means of the initial investment and the ongoing monthly fee.
And finally as a franchisee you will only get paid for the work you bring in. Its a supercar club so its not your everyday franchise.
And in regards to the earnings the 85k pa is if i sell 20 memberships a year. But it could be anything up to £500,000 pa if you can sell 100 memberships a year, obviously the latter is highly unlikely, but it goes down the other way so if I only sold 5 memberships i would only earn just ove £21k.

In response to the answer about doing a business plan, the only reason I am trying to avoid this is because I have read so many stories of people spending months and months with excellent business plans and backgrounds only to be turned down in the end?? I understand that they are very difficult to actually get?? And I dont have months to get this money together. I have been chosen to join the franchise and dont really have masses of time

foreign_correspondent · 10 January 2008 at 10:19AM

are you sure about this franchise? It sounds a bit like pyramid selling to me.

iolanthe07 · 10 January 2008 at 10:26AM

I really don't think you should lie to the bank about the reasons for the loan. Apart from the moral question of lying, it could be construed as fraud and come back and bite you on the bum one day.

mrcow · 10 January 2008 at 10:35AM

foreign_correspondent wrote: »

are you sure about this franchise? It sounds a bit like pyramid selling to me.

It sounds exactly like it to me!

What exactly are you getting for your £25k?Are you sure they are not seeing you coming?

Debt_Free_Chick · 10 January 2008 at 10:37AM

wellywells wrote: »

And in regards to the earnings the 85k pa is if i sell 20 memberships a year. But it could be anything up to £500,000 pa if you can sell 100 memberships a year, obviously the latter is highly unlikely, but it goes down the other way so if I only sold 5 memberships i would only earn just ove £21k.

If it's that easy, why don't they just do it themselves?

In response to the answer about doing a business plan, the only reason I am trying to avoid this is because I have read so many stories of people spending months and months with excellent business plans and backgrounds only to be turned down in the end?? I understand that they are very difficult to actually get?? And I dont have months to get this money together. I have been chosen to join the franchise and dont really have masses of time

A business plan is not a means to get a loan. A business plan is your roadmap for making the business work. It shows you how much money you could make, having deducted the cost of running the business.

It's for you - but, yes, lenders will want to see it. After all, a loan is an investment in your business so they want to see that the business will work; generate enough to pay the financing costs and still produce a profit.

mrmajika · 10 January 2008 at 10:49AM

Is this the Supercar club timeshare scheme whereby high UK earners get the 'oppourtunity' to join the club and then have access to fully taxed / serviced high end cars (such as bentleys etc) for 6 months or so, before handing them back and swapping for another?

Please tell me it isn't!

£25k loan needed please help

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