Business Loans

[gemd89]

Hey, I was wondering if banks are still lending to small businesses? Are the rates astronomically high?

Im 21, have no property etc and i want to use the money for stock. I have an excellent credit rating but maybe thats not enough these days?

If the banks wont lend what are the other options available to me?

Thanks
Gemma

 

[papverpoppies]

Hey, I was wondering if banks are still lending to small businesses? Are the rates astronomically high?

Im 21, have no property etc and i want to use the money for stock. I have an excellent credit rating but maybe thats not enough these days?

If the banks wont lend what are the other options available to me?

Thanks
Gemma

Put a business plan together, but banks are not lending at the moment.
You could post up on zopa I think they credit check you, before you get to post.

With you age what about the princess trust.

Outside of that I do not think there is much else going.


Poppy xx

 

[LicensedToTrade]

Im 21...have no property

I have an excellent credit rating

How many mobile phone contracts and credit cards have you had to have an excellent credit rating at the age of 21?

 

[papverpoppies]

Hey, I was wondering if banks are still lending to small businesses? Are the rates astronomically high?

Im 21, have no property etc and i want to use the money for stock. I have an excellent credit rating but maybe thats not enough these days?

If the banks wont lend what are the other options available to me?

Thanks
Gemma

Are you on the electoral register, it helps with credit rating.

Poppy xx

 

[thebigIAM]

Actually, I got a business loan last June. I thought the rates were a high but still worth going ahead with. If you have it all figured out what you will be doing with the money and what sort of return you expect and how to repay it, it might still be worth approaching your bank and seeing what sort of response you get.

With this question and your one about hiring staff, it sounds like you've decided to just go for it. Personally, I've felt more in my comfort zone doing the slowly slowly catchee monkey thing. Whenever I've been going for broke I've - er - gone broke.

 

[MASSEY]

go for a personal loan and say your buying a new car or something. They wont give you a business loan.

 

[Graemem]

go for a personal loan and say your buying a new car or something. They wont give you a business loan.

Is there much of a difference if you did that? Are you not personally liable either way?

 

[bizloanservices]

Is there much of a difference if you did that? Are you not personally liable either way?

I don't think the comment was around personal liability. If you are in salaried employment and are looking to start a business but lacking capital, a personal loan can be easier to get. I know of many who have applied for a personal loan before they leave their job to start up. Having that salary makes the difference when applying.

Going back to the original question, don't get sucked in to thinking that the banks are not lending - they are but you have to have a credible plan and we shown to be risking your own cash as well. If you are after 100% funding then forget it.

Getting start ups funded though is tougher and you have to accept that you'll need to 'invest' a fair amount of time in the process.

If you have no assets and little cash then your chances of success are low. Look elsewhere.

Interestingly, even established companies are now casting their net wider for funding. A recent survey from Forum of Private Business revealed that the amount business expect to source from external sources – primarily bank lending – has seen a 27% decrease on the last survey in 2010. The gap is expected to be filled from internal reserves and sources – such as directors, friends and family members – and that figure has increased substantially from 10% in 2010 to 45% for 2011.

This shows that established businesses have realised that they can no longer depend on banks, who now need to be seen as ‘lenders of the last resort’.

 

[MASSEY]

A biz plan is probly a waste of time. If gem has no decent trading history and shown decent income they wont lend. Which is why if she is in emplyment and has a salary she will get a loan for a 'car' easy.

 

[LicensedToTrade]

Naturally of course a business plan has more purpose than simply being used when approaching a lender.

 

[Esk247]

I'd of advised Gem to go to the Princes Trust first but i don't think they'll take her on now she's already set up the biz. Shame that, they could offer funding support for start-ups if you're under 25 and they helped me set up my web business, purchased my computer equipment and such but i could only start the business after meetings with the mentor.

Don't run before you can walk. You might just pull it off, get a loan, make lots of dosh and become a millionaire, or you might totally balls it up because you're still learning and then end up with a loan debt around your neck.

I try to limit my risk where possible. Some say that you have to take a risk to be in business, not necessarily, if you plan well and go carefully you can build a solid foundation for a succesful company. Nothing worse than running in to all of this and falling flat on your face.

You can always just go to your bank and ask for advice. They'll probably turn you down but they'll give you reasons for that and may even be able to offer you examples of what you have to do to get a loan in the current climate...after all..they're sales people these days, selling products from the bank.

 

[papverpoppies]

I'd of advised Gem to go to the Princes Trust first but i don't think they'll take her on now she's already set up the biz. Shame that, they could offer funding support for start-ups if you're under 25 and they helped me set up my web business, purchased my computer equipment and such but i could only start the business after meetings with the mentor.

Don't run before you can walk. You might just pull it off, get a loan, make lots of dosh and become a millionaire, or you might totally balls it up because you're still learning and then end up with a loan debt around your neck.

I try to limit my risk where possible. Some say that you have to take a risk to be in business, not necessarily, if you plan well and go carefully you can build a solid foundation for a succesful company. Nothing worse than running in to all of this and falling flat on your face.

You can always just go to your bank and ask for advice. They'll probably turn you down but they'll give you reasons for that and may even be able to offer you examples of what you have to do to get a loan in the current climate...after all..they're sales people these days, selling products from the bank.

If Gem, is serious about taking on staff, then she has to do this right.
It is not fair to employ someone, only for a few weeks later find out there is no work ie money to pay them.

As restricting and hard as soldering on, on your own; can be, it's far better than running - before you walk.

Also, if you do get into financial difficulty everything you want to do from them on will become ten times harder - you are only 21 Gem, get it right (or as right as you possibly can).

Poppy xx

 

Hey, I was wondering if banks are still lending to small businesses? Are the rates astronomically high?

Im 21, have no property etc and i want to use the money for stock. I have an excellent credit rating but maybe thats not enough these days?

If the banks wont lend what are the other options available to me?

Thanks
Gemma

In direct answer to your questionns:

1. Yes they are, but only if they can be very comfortable of repayment-ability and fall-back security.

2. No one can tell you if rates are astronomically high, since it is entirely subjective.

Rather than focusing on rate, you should look at retutrn on investment (ROI). Since your requirement is stock, the payback should be reasonably quick so you might be best advised to do what business owners have donne through the ages., and use credit cards. The APR looks high, but in reality your overall borrowing costs might well be less than a business loan if you repay quickly or dip in and out.

 

[gemd89]

Maybe not an excellent credit rating then - ive never borrowed money - my car and anything i own has been brought from my work wages or from money i have personally saved. I do have 3 phone contracts though with 2 big companies and a few other things to get credit score higher.

I know what your saying about risks but this is a calculated risk i think. I can go slow, slow slow for the next 5 years or i can get the loan buy more stock and sell, sell,sell - expand and grow? I like to think positive and realistically

Ill ring the bank and see what they say - shame about the princes trust!

Gemma

 

[Graemem]

I don't think the comment was around personal liability. If you are in salaried employment and are looking to start a business but lacking capital, a personal loan can be easier to get. I know of many who have applied for a personal loan before they leave their job to start up. Having that salary makes the difference when applying.

I was just wondering if you did go with a personal loan for the business would it make a difference? Could there be any consequences? As far as I can tell you'd be personally liable for the loan either way wouldn't you?

I'm in a similar situation to the OP so was quite interested by that suggestion.

 

[Simply Bedrooms]

Excellent news today, apparently the government is going to force banks to lend to businesses this year. A good time to try for financing.

 

[360interactive]

Excellent news today, apparently the government is going to force banks to lend to businesses this year. A good time to try for financing.

I would love to know how they will enforce this.

 

[papverpoppies]

Excellent news today, apparently the government is going to force banks to lend to businesses this year. A good time to try for financing.

Yes, we can try......but I doubt much; many will succeed.

Not aware that the Government can force the banks to 'do' anything, even those they own!

Can you see the 'banks' independant shareholders agreeing to lend money to a possible small business, that probably only wants £1000 to be able to expand...no they would rather sink millions into dodgy oversea verntures!

Apparently the 4 big banks and the Gov have been in talks for some 10 weeks trying to find a middle ground, as they know that new small businesses are needed, but unless the banks co-operate over funding; this is not going to happen, and the economy needs new businesses in order to grow, but I do not think they can force the banks to do this.

Poppy xx

 

[choorian]

I've got good credit history, and I have a really good business plan. My bank said ' they will only lend to me if I have 25 - 50% of my own money' no bank will give you 100% loan. They won't take the risk, my bank manager said ' if use my own money, I work harder for it' So i doubt they will give you a loan unless you have a business plan and 20-50% of the full amount you're asking for. Go for a personal loan, borrow from freinds and family if the amount is huge. Princes trust, apply to them when you've got a business plan, my sister got money from them, she's just turned 21 but she was self employed (only 4 months) and had good earnings and wanted to expand and her account did paper work she submitted.

Good luck getting the finance

 

[Clarkewoods]

I'm going through the same kind of thing. i've got £2k im hoping the princes trust will be able to lend me £4k then hopefullt the bank will match that £6k and ill be sorted the Princes trust loan repayments are pretty low but the repayment would probably be around £250 a month which if I am struggling one month I will just pull from my own account to cover.

 

[RedEvo]

daft though it may sound (retail) banks don't take risks. You'll get a loan if they perceive it as no risk.

d

 

[MMEngServ]

Iv got this problem right now, cant get a loan via my business bank account. Im 23 self employed, got more than 1 year of trading under my belt, and when the bank checked for a loan for my business, they told me i had excellent accounts but when they checked if i was elegible the rate was ridiculous even my business bank manager was shocked, she even had to call her manager to check to see if the computers had crashed.

Went down the personal route, got a few mobile phone contracts, a small monthly car insurance payment, and a small usuage on my credit card every month, checked my credit rating with experian and it was just short of Excellent, went to my personal bank for a 'Personal Loan to buy a car' and they said no aswell..

just difficult times i guess, worse thing is no one can really explain why our rates are so high, or why my personal bank cant offer anything with my history.. all i can say is stay clear of Barclays for any type of loan.

 

daft though it may sound (retail) banks don't take risks. You'll get a loan if they perceive it as no risk.

d

As an (involuntary) shareholder, and voluntary depositor it doesn't sound at all daft to me.

Perhaps a line they should have folllowed a few years ago>?

 

Excellent news today, apparently the government is going to force banks to lend to businesses this year. A good time to try for financing.

That's brilliant. I think they should also force the banks to give mortgages to street-sleepers, thereby divesting themselves of responsibility for homelessness.

 

[papverpoppies]

That's brilliant. I think they should also force the banks to give mortgages to street-sleepers, thereby divesting themselves of responsibility for homelessness.

With what could be waiting around the corner in respect of the economy over the next xx amount of months, do not hold your breath in terms of loans from the banks.

They will be keeping our money for themselves; and the already wealthy!

Poppy xx

 

[papverpoppies]

That's brilliant. I think they should also force the banks to give mortgages to street-sleepers, thereby divesting themselves of responsibility for homelessness.

No disrespect to the homeless, but the banks should buy lots of good heavy duty cardboard/plywood and get builders to make good homes out of it. These could then be distributed amongst the homeless.

This would serve two fold.

Homes
Help the cardboard/plywood industry
Give builders work.
Along with a few others.

Poppy xx