Getting a loan for the first time.....

[Replacemyscreen]

Hello everyone,

First I'll start of with a bit of the background story so you can get a correct idea of my situation. I have ran a successful one-man I.T business for the last three years. When I started getting a lot of emails asking for repairs to broken laptop screens and the likes of IPhones and such, I thought it would be a good idea to start another business only specialising in LCD screen replacements in a huge range of products.

Now work as really took off! Am receive items for repair from all over the UK and it has fully funded my last year of uni and now have my own workshop in a warehouse.

Lets use a laptop screen replacement as an example. I pay around £67-£75 for a screen on ebay and having to make my customers wait the postage time. It is possible for me to buy screens from china at £44 a unit would allow me to increase my profit and allow me to give a lower price to my customers, but for me to buy a number of screens am look to ask the banks for a loan of £1500-£2000. This is were I need the help.

I don't have a bad credit history.....because I don't have a credit history. I was given a phone contact as a present, I couldn't get financed on a motorbike so my parents paid it and I paid them the payments each month, I drive my dad's car and pay him in cash monthly.....am sure you can see were this is all going. How will the banks look at me when I ask for £1500+? Do you think there's any likely hood I could get a look in?

If anyone could give me any advice I'd be extremely thankful.

 

[RBS]

Hello everyone,

First I'll start of with a bit of the background story so you can get a correct idea of my situation. I have ran a successful one-man I.T business for the last three years. When I started getting a lot of emails asking for repairs to broken laptop screens and the likes of IPhones and such, I thought it would be a good idea to start another business only specialising in LCD screen replacements in a huge range of products.

Now work as really took off! Am receive items for repair from all over the UK and it has fully funded my last year of uni and now have my own workshop in a warehouse.

Lets use a laptop screen replacement as an example. I pay around £67-£75 for a screen on ebay and having to make my customers wait the postage time. It is possible for me to buy screens from china at £44 a unit would allow me to increase my profit and allow me to give a lower price to my customers, but for me to buy a number of screens am look to ask the banks for a loan of £1500-£2000. This is were I need the help.

I don't have a bad credit history.....because I don't have a credit history. I was given a phone contact as a present, I couldn't get financed on a motorbike so my parents paid it and I paid them the payments each month, I drive my dad's car and pay him in cash monthly.....am sure you can see were this is all going. How will the banks look at me when I ask for £1500+? Do you think there's any likely hood I could get a look in?

If anyone could give me any advice I'd be extremely thankful.

What about credit cards? Expensive, but option.

http://uk.zopa.com/ZopaWeb/

 

[tony84]

If your business is doing well enough to fund uni then why would your bank refuse you an overdraft or loan ?

Use your student loan if that fails? Not as fun as spending it at the SU but hey ho if your business is doing that well then you wont wait long for the money back

 

[internetspaceships]

If you've run a company for three years then you'll have accounts. If it's successful as you mention in your OP, then the banks shouldnt have an issue.

Another poster mentioned a credit card. Not a bad move for this level of expenditure as you'd be paying it off as you are paid.

Finally, be very careful buying from china for a business your size, one foul up on a transaction could seriously financially mess you up.

 

[elaine@cheapaccounting]

I assume you have accounts for your business?

Try Princes Trust or Shell Live Wire - both help 'young people' in business. (Google will get you to them).

What about your Uni - many have business incubators etc. Which one are you at?

You will need a business plan but they may help with that also.

Good on you for giving it a go - well done.

 

[elaine@cheapaccounting]

BTW - can you mend my i phone!? Not a broken screen but a loose connection on volume buttons

 

[chalkie99]

Have you factored in all the import costs such as shipping, duties and agents handling fees?

And remember if you have a faulty unit bought in this country you can at least return for refund. You will probably have to build in a margin for faulty import goods which end up being written off.

Other than that I agree with the above - use your trading records to present to the bank for a loan.

 

[internetspaceships]

Give these guys a look Elaine

Not used but I've not heard any bad things.

http://www.alliphonerepairs.com/Apple-IPhone-3G?gclid=CPP3keLKzKgCFcJP4QodWzaNpA

 

[elaine@cheapaccounting]

Give these guys a look Elaine

Not used but I've not heard any bad things.

http://www.alliphonerepairs.com/Apple-IPhone-3G?gclid=CPP3keLKzKgCFcJP4QodWzaNpA

thank you

 

[Replacemyscreen]

Thanks to everyone for the fast reply.

That 'zopa' doesn't look to bad! Thanks for the link Rob.

If your business is doing well enough to fund uni then why would your bank refuse you an overdraft or loan ?

I have not been refused, I was more just looking for advice. The money I put in the bank can be in strange amounts at time because around 70% of the money I get comes from paypal payments and about 95% of my outgoings are paid using paypal. The only money I put in the bank is when I get paid in cash which is around the £100 a week mark and that doesn't last stay in long when am buying 5+ screens a week.

Finally, be very careful buying from china for a business your size, one foul up on a transaction could seriously financially mess you up.

Do you have any advice for me then? The only place am looking to buy from is dhgate.com. Has anyone hear had any experiences with it?

Have you factored in all the import costs such as shipping, duties and agents handling fees

This dashed all my Alan sugar dreams! I don't/didn't know anything about this. Could you link me some were with some details about it? If I was going to import say a 10kg box with £1700 worth of kit in, what might I expect to be looking at? Just a ball park figure.

many have business incubators

I shall research that now!

Thank you everyone for your input. You have all been a great help.

 

[MyAccountantOnline]

Can I just say how super it is to hear a young person working hard setting up a new business (without sounding too old myself here) good on you.

I suspect a bank will look favourably at you and you may be able to get an overdraft in place for this type of expenditure if not I'd look at the credit card option as a practical alternative.

Very best of luck to you.

 

[Chris Ashdown]

If you look on the HMRC site they will tell you the import duty you have to pay to import screens, assuming you would get them imported by someone like DHL or FEDEX they would do all the paperwork and bill you before delivery

Please don't fall into the "I must be the cheapest" you need to establish yourself as the best, fastest or/and the best service and then you can set your price higher as people want you and not just on price

Have you discussed trade prices with main UK whole-sellers like RS components, Maplin etc. you could then just continue buying a few at a time but at discount prices

Get your accounts going as you will probably owe HMRC some dosh for past trading, you shoul advise them you are self employed after 3 months

Good Luck