Funding help / Advice

[homeinfo]

Hi

Sorry to do this on a first post but I am getting pretty desperate!

For the past 6 months I have been developing a new service which is now at the point of launch. My service is up and running and I have my first couple of customers on the books. I have invested pretty much everything I have so far and I have reached a point where I cannot afford to put any more in.

I have not yet approached a bank as I am fearful of the answer as a few years back as a kid I was wreckless with my money and I built up some debt. This has been clear for at least 2 years and I have well and truly learned my lesson but I am sure a bank won't view it the same way and I would be refused. I hate the idea of borrowing from banks anyway.

I am tearing my hair out trying to fund this somehow, I have asked family but skint is a word I am hearing often. I feel very restricted as I have a perfect product but no way to get it out there.

What is most irritating is - like I mention, the hard work is done and customers are on board, but I can't service these customers without an investment. I need to seize the moment too, as although I have a very strong brand and patent applications in place, I would like to get out there and make an impact before others try to provide similar services.

So, does anyone have any suggestions of how I can raise approximately £2500 quite quickly?

Thanks in advance.

 

[Ozzy]

Hi,
In the scope of business investment £2,500 is very very little. To small for anyone to be really interested in investing into a business, are you sure you have allowed for everything? Is this all you need?

If it is then if I was in your position, as I was about 2 years ago, I would look at a personal loan or credit cards. They may sound risky, but part of being your own boss is being prepared to take a gamble on what you believe in.

I borrowed £37,000 3 years ago to start Quick Formations, and that was on both a personal loan and credit cards. I tried approaching the banks for a business loan and they all turned me down. I was confident I could do it so took a loan out in my own name and applied for credit cards in both my name and my wifes. 3 years later the loan and the credit cards are all paid off, so the gamble worked and the banks missed out on all that interest!

So, firstly make sure the amount of money you need to raise does really cover everything, and a business plan will help you work this out. If you need help with this try talking to your local Business Link.
Then, after doing your business plan you should know exactly how much money you really do need. Try the banks, even if you dont like that idea, and if they say no look long and hard at your own personal circumstances and decide if you feel you have what it takes to take the leap of faith ... if you do then consider raising the finance personally.

Insert personal disclaimers along lines of its your choice and no-one elses!

 

[gj]

Sometimes preparing abuisness plan to approach a bank with can give you tremendous insight into your own business anyway.

It forces you to ask yourself some important questions, like Ozzy's about whether £2,500 is really all you need - don't forget working capital perhaps to funds debtors between the point of sale and you actually receiving payment etc.

As Ozzy says approach a bank anyway - they may help and it will be a good exercise to go through

Graham

 

[homeinfo]

Thanks for the replies.

Truly, I do only need to get £2500, I have been offered £45,000 but its really overkill. Monthly running costs barely reach £175pm but its this final equipment investment I just can't seem to raise. It's bonkers that I can get more than I need but if I go for a sensible approach I get turned away.

I was speaking to a friend and he reckons I could do with coming across a bit more needy in the business plan / begging letter Along the lines of they may be looking at it and saying "if you are already setup and have customers, what do you need us for" Do you think this could be the case?

 

[Ozzy]

I dont believe that would be a wise route to go down. Also, the reason £2,500 seems harder to get is because it is a small amount that almost anyone can get personally so the banks may take the view that you are forgetting something (like marketing budget, 2-3+ months running cost to break even, product costs, wages till break even, printing stationary, website, anything else a business needs to get up and running and market its product.
When asking for more it may be considered that you have thought hard about every eventuality and that could give a lender more confidence in you... Obviously though you need to justify every pound you ask for!