Bank Interest Rate

[Deleted member 7199]

I've been speaking to two banks about obtaining £35k finance for a new franchinse. This loan will be a Small Firms Loan Guarantee one.

One bank have offered a rate of Base + 4.5%, the second have offered Base + 4.0%. I have no idea whether these represent good value or whether I should keep shopping around. Could anyone advise?

 

[bwglaw]

Ask the Bank for the APR and this is the best way to compare the rates.

I think base Rate is currently 4.5% so you are looking at 8.5-9% interest. APR might be slightly higher

It might be a good idea to speak to your Accountant, if you do not have one it is advisable to have one on board at the early stages because you will need him/her later

I am not a financial expert but just experienced in arranging credit for our companies and often check the agreements

Jonathan

 

[Kent Accountant]

Hi

This is almost impossible to answer on the information given. However, I wouldn't have considered it a particularly bad rate for a start up business relying on the SFLGS. Don't forget that there is also a 2% premium payable to the Treasury for the guarantee that they give to the bank. Have a look on this site at the franchising forum and have a word with some of the franchising experts on the site to discuss whether you are looking at a potentially successful business.

You can also get free advice from your local Business Link www.businesslink.gov.uk They also have a section on franchising at http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073866247

Hope this helps

 

[Let it ride!]

Hi AB1

Funder I regularly use for my clients for SFLGS will start at a flat 8% (plus the 2% on outstanding balance to the govt) - on a £100,000 loan over 3 years works out at £3334 per month there or there abouts.

Normal SFLGS rules would apply

Looks as if the rates you are being quoted are pretty competetive.

Kind regards

Ian