Finance for a new business

[Unicora]

Hello,

I am in need of finance for my business but as soon as self-employed is mentioned the ability to get finance disappears.

Basicly I am losing out on allot of business due to needing a replacement car. Unfortunatly I don't seem to be able to get any personal loans or finance. I was thinking about a business loan but not sure how you approach the subject with the bank and what critera etc

Anyone have any advice?

 

[akirk]

I think that there is very little money around in terms of loans to a business - personal loans will be based purely on your credit rating...

there are of course other options - there are lease cars from a low price (sub £100 inc. vat) which any business should be able to handle within its costs... If your company can't manage that then you might need to re-evaluate your charging model

you are based in telford - not sure exactly where, but assume that it is a reasonablly built up area? could a moped / bicycle do the job?

it is worth thinking creatively... and it is also worth thinking that a company should be able to finance you sufficiently to run transport if that is an essential to picking up business... whether it is in the amount you pay yourself, in expenses, or...

Alasdair

 

[Unicora]

The problem is that by not being able to get around I am losing work. An example is that I have a job that will pay enough to pay for a new car however the offices are in a very hard to get to place and even with trains and a push bike it would take me a LONG time to get there. A taxi is too expensive and other public transport doesnt go to this area.

I am looking into renting one but this also is extreamly expensive.

TBH I can pay the loan off in a few months but its the problem of needing it sooner then two months.

 

[CSBob]

It's currently extremely tough for many to even get an overdraft extension on their business account, so don't get your hopes up.

One thing you could try is to prepare two cash flow projections for your bank manager. On the first one you should show the ongoing, dismal picture for the next 12 months without your car, and on the second show a (realistic!) projection of the difference having the car would make. The comparison often drives (no pun intended!) the point home better than a single projection.

An associate of mine had some moderate success with this method, being in a similar position to yourself as he desperately needed a third delivery van. His two existing ones are so clapped-out they both spend a third of their time in for repairs!

You've nothing to lose but a bit of your time.

 

[laguna]

One thing you could try is to prepare two cash flow projections for your bank manager. On the first one you should show the ongoing, dismal picture for the next 12 months without your car, and on the second show a (realistic!) projection of the difference having the car would make. The comparison often drives (no pun intended!) the point home better than a single projection.

Good idea to show graphs too - a picture paints a thousand words as they say!

 

[Mattviatura]

We can sometimes arrange finance for cars with new-start businesses as long as you are realistic about the amount you are borrowing.

We don't deal with sub prime companies however and if there is a lot of adverse credit history we won't be able to help.

Feel free to get in touch if you like.

 

[akirk]

The problem is that by not being able to get around I am losing work. An example is that I have a job that will pay enough to pay for a new car however the offices are in a very hard to get to place and even with trains and a push bike it would take me a LONG time to get there. A taxi is too expensive and other public transport doesnt go to this area.

I am looking into renting one but this also is extreamly expensive.

TBH I can pay the loan off in a few months but its the problem of needing it sooner then two months.

if it takes a long time to get there, then it is a matter of getting up earlier in the morning! How hungry are you for the work? What will you do to get it?

your website says that you run a web design company - presumably that is from home, so the only time you need to go out to see the client is an initial meeting? Communicate via skype / email / phone / etc. we have a number of clients we have never met in all corners of the globe I certainly don't pop over to Moscow to see my Russian clients - esp. as the CEO of that business is Argentine and based in Buenos Aires! - we use technology to communicate quite satisfactorily.

I am sure that it is not the answer you want - which would be to find a way to get another car - but I do think that there are lots of options which do not require borrowing - and ideally when starting a business you should be looking to minimise borrowing.

you state on your site:
The idea behind Unicora was simple; create low cost website options for small businesses and freelancers.
and that you have been going since 2009 - you need to evaluate whether you are charging enough money to run the business - you need to be bringing in enough to pay yourself, make a profit, pay the overheads, be able to run a car, etc. If you are charing too little - yes, people will use you, but you don't have a viable business.

regards

Alasdair

 

[oldeagleeye]

You can pick up a reliable cheapie anywhere for well undr £500 quid. You must be able to earn that on one job surely.

Stay aware from car loans that you can get if you have a bad credit history your'll end up paying double perhaps 3 times what the car is worth.

BTW. It is harder to get a biz loan that a personal loan for a car.

So if all else don't work its a bike and come on now. You could cycle from one end of teleford to the other in under an hr.

rob

 

[The Pines]

You can pick up a reliable cheapie anywhere for well undr £500 quid. You must be able to earn that on one job surely.

Stay aware from car loans that you can get if you have a bad credit history your'll end up paying double perhaps 3 times what the car is worth.

BTW. It is harder to get a biz loan that a personal loan for a car.

rob

Amen to that, brother!

Nissan Micra, Almera
Honda Civic, Accord
Mitsubishi Colt, Lancer
Toyota Corolla

You'll be able to get a decent (albeit old) version of any of these cars for £500, and if bought privately from the local OAP, it'll probably have T&T aswell! (You'll notice that they're all Japanese - yes the parts are more expensive, IF you need them, but in general they are a million light years away on terms of reliability)

Save your credit for expanding your business, not wasting it on depreciation and interest charges.

 

[laguna]

When I first started out I couldn't afford the luxury of a car and went everywhere on the bus or train carrying all my tools and step ladders!

Did I look cool?
Definitely not but it enabled me to get to the job and earn my way.

 

[Cathy Duncan]

Well, in the current scenarios, people have become so much suspicious that one cannot rely on the others. So, I would advise to be very much careful and well-read while making any kind of deals.