Help with funds please

[Jason]

Hi
I was just wondering if anyone has any idea of how I could get £5k so that I can get more stock in for my business?
I already have the business up and running the problem is that I had to borrow the money to start it up off friends and now that I have payed them all back with the interest it has left me with little stock and not any money to get in any more. I know it might sound like I have not made a very good start to the business but I have I have a lot of orders for things and because of the type of business it is it is not possable to ask for deposits so I have no money to get the stock people are asking for.
Please someone help me.

 

[Jayne]

Why not ask your bank manager for an overdraft?

Jayne

 

[bwglaw]

Jason

What kind of business is it because there are different sources for different industries. How long have you been established and how old are you?

 

[Jason]

I have tryed that but my bank manager was not very helpful.

 

[Jason]

Jason

What kind of business is it because there are different sources for different industries. How long have you been established and how old are you?

Its an animal related business I has been licensed sence July 2005 and I am 35

 

[bwglaw]

Do you have a good credit-rating? The fact that you have only been in business 6 months is a factor why some banks won't lend.

Are you a sole-trader or Ltd Company.

Sometimes your own bank does not help and you may have to be prepared to try other banks. Investors may be another option. At 35, I do not think there are any grants for YOU as a business but depending on what you do there maybe grants for your business

Cannot advise much without knowing exactly what your business is. Do you do animal-grooming?

 

[Jason]

Do you have a good credit-rating? The fact that you have only been in business 6 months is a factor why some banks won't lend.

Are you a sole-trader or Ltd Company.

Sometimes your own bank does not help and you may have to be prepared to try other banks. Investors may be another option. At 35, I do not think there are any grants for YOU as a business but depending on what you do there maybe grants for your business

Cannot advise much without knowing exactly what your business is. Do you do animal-grooming?

My credit-rating is not that good.
I'm a sole trader I have tryed most banks but like you said I have only been running for 6 months so there not much help.
No I don't do animal grooming :lol: I'm a Reptile dealer and deal mainly in venomous snakes

 

[bwglaw]

The poor credit-rating will also be a factor. I had poor credit some time ago after leaving Uni etc. Now that my credit-rating has improved dramatically I can borrow anything.

Being a sole-trader does not help either because an individual with a poor credit-rating will affect the business because of your current legal status. Having a Ltd Co creates its own legal status and often its own credit-rating.

Do you have any security/assets as part of the business, or any personal security/assets? I think banks are also tentative of lending monies to a 'reptile dealer' as they may see this as a non-profitable business.

Where does the business income come from? what services do you offer and if you are prepared to tell me, what is your current turnover?

You will find that on this forum many members are helpful with advice and resources hence asking the questions. I am also an active investor in business but don't think 'reptile' business is for me. However, happy to advise as an investor.

Overall, you may have to bide your time and build up some history, improve credit-rating and remove any CCJ's etc. It is what I did and believe me it pays off in the end.

 

[fastfences]

Hi Jason, and welcome.
Your credit predicament is not easily overcome -in the short term. Short of applying for another credit card you have little with which to bargain with.

However, your greatest asset and credibility is with your friends, from whom you've previously borrowed AND repaid.

I believe that they, or one of them, would be your best source of finance. Can you not borrow an amount smaller than £5K to re-stock in smaller amounts and still generate enough turnover to cover repayments?

Cheers, Nigel

 

[Jason]

The poor credit-rating will also be a factor. I had poor credit some time ago after leaving Uni etc. Now that my credit-rating has improved dramatically I can borrow anything.

Being a sole-trader does not help either because an individual with a poor credit-rating will affect the business because of your current legal status. Having a Ltd Co creates its own legal status and often its own credit-rating.

Do you have any security/assets as part of the business, or any personal security/assets? I think banks are also tentative of lending monies to a 'reptile dealer' as they may see this as a non-profitable business.

Where does the business income come from? what services do you offer and if you are prepared to tell me, what is your current turnover?

You will find that on this forum many members are helpful with advice and resources hence asking the questions. I am also an active investor in business but don't think 'reptile' business is for me. However, happy to advise as an investor.

Overall, you may have to bide your time and build up some history, improve credit-rating and remove any CCJ's etc. It is what I did and believe me it pays off in the end.

I don't have any CCJ's just managed to miss them but it all went a bit pair shaped when an employer of mine went bust.
The business income comes from private reptile keepers from the UK and France Germany and Holland and I do trade supplies to shops in the UK. I have also supplied some very rare snakes to a Uni that had been looking for this type of snake for a few years and I found them for them in a couple of week's.
There are a lot more things that can also be supplied as add on's like food housing lighting heating etc to go with selling the reptiles.
It is like you have said the Reptile business is not for everyone and I have thought about asking reptile keepers for investments but I know that can make for a very bad business relationship.
One other point is that the Reptile shop in our town is within half a mile from me but the owner of that has upset all his customers with his rude attitude and so I get call's from most of them asking for stuff that I just don't have the money to buy in.
I try to keep my profit margins at around 40%

 

[Jason]

Hi Jason, and welcome.
Your credit predicament is not easily overcome -in the short term. Short of applying for another credit card you have little with which to bargain with.

However, your greatest asset and credibility is with your friends, from whom you've previously borrowed AND repaid.

I believe that they, or one of them, would be your best source of finance. Can you not borrow an amount smaller than £5K to re-stock in smaller amounts and still generate enough turnover to cover repayments?

Cheers, Nigel

Hi Nigel
The problem is that non of my friends or family are that well off and are unable to lend me more than around £250 each so that makes a lot of people to pay back I could restock with a lot less but what I am trying to do is to find just the one person that would invest some money instead of having half a dozen to pay back which was a pain last time as one would moan about me paying the other before him and so on

 

[Cornish Steve]

Are you able to present a credible business plan to potential investors? Can you justify your need for £5K (as opposed to £4K or £3K)? Can you show a healthy return on the investment based on conservative assumptions?

No matter what the source of funding, you'll need to convince someone of the business case behind the investment.

 

[bwglaw]

One needs to ask oneself why a business needs to 'borrow' or seek investment to buy more stock. Investing in stock is very risky and I personally would avoid that. However, if a business was a Ltd Co I would look at it differently because for my investment I would expect a number of shares in return.

You have mentioned your sources of income but no mention of securities. Are you leasing a shop? Do you own any freeholds? These questions are what an investor will ask. If a business has no security but the proprietor has his own home I would put a charge on the property in the event the business fails.

Also as an investor I would ask what liabilities the business has to ensure that the investment is not to pay off any debts, unless that was agreed and it would ensure the prosperity of the business.

I think you need to decide whether you want to get an investor or borrow from family.

 

[Jason]

Are you able to present a credible business plan to potential investors? Can you justify your need for £5K (as opposed to £4K or £3K)? Can you show a healthy return on the investment based on conservative assumptions?

No matter what the source of funding, you'll need to convince someone of the business case behind the investment.

I do have a business plan that was one that I did with a bank but that was when I was looking to open a shop but as the bank manager thought I was mad (as in keeping snakes) he didn't even look at it.
The £5k is just max figure I was hoping to get someone interested and then work on a lower figure if nessersery. The thing is in the reptile world as far as trade or wholesale go if you spend £1k on reps then your profit is around 40% if you spend £2k then its more like 75% and if you spend £5k then your upto 200% profit wholesalers work in round figers of £ks

 

[Cornish Steve]

Then it sounds as if you need to start with the £1,000, earn some profit, move to £2,000, earn more profit, and so on. This will earn you some credibility with the bank manager.

It's going to be a lot easier to find £1,000 than £5,000.

 

[Jayne]

Are these snakes bread in captivity or captured in the wild?

Maybe a Zoo would invest in your business with some sort of breeding plan on offer.

Jayne

 

[Jason]

One needs to ask oneself why a business needs to 'borrow' or seek investment to buy more stock. Investing in stock is very risky and I personally would avoid that. However, if a business was a Ltd Co I would look at it differently because for my investment I would expect a number of shares in return.

You have mentioned your sources of income but no mention of securities. Are you leasing a shop? Do you own any freeholds? These questions are what an investor will ask. If a business has no security but the proprietor has his own home I would put a charge on the property in the event the business fails.

Also as an investor I would ask what liabilities the business has to ensure that the investment is not to pay off any debts, unless that was agreed and it would ensure the prosperity of the business.

I think you need to decide whether you want to get an investor or borrow from family.

I need to borrow the money to buy more stock as I can't aford to get in the stuff people are asking for.
I run the business from home in my spare time I have a full time job too.
I have no security.
I have a persoal loan which has about £600 left to pay but that comes out of my money from my full time job so has nothing to do with the business and I have no other debts to pay off.
And like I said my family and friends are all pritty much skint so it would just end up in a big bust up if I borrowed from them again.
I don't know any thing about LTD companys never really thought about them any advice on that?

 

[Jason]

Are these snakes bread in captivity or captured in the wild?

Maybe a Zoo would invest in your business with some sort of breeding plan on offer.

Jayne

A Zoo? that's not quit how zoo's work unfortunately.
Most of the snakes are captive breed but sometimes captured in the wild or captive farmed.

 

[Jayne]

I cannot think of anything else to help, unless you go down the credit card route, but interest would be large.

Or make them pay for the snakes up front?

Jayne

 

[Jason]

Then it sounds as if you need to start with the £1,000, earn some profit, move to £2,000, earn more profit, and so on. This will earn you some credibility with the bank manager.

It's going to be a lot easier to find £1,000 than £5,000.

I would start with £1,000 if someone would invest it but I don't think I know anyone with £1,000

 

[Jason]

I cannot think of anything else to help, unless you go down the credit card route, but interest would be large.

Or make them pay for the snakes up front?

Jayne

Tryed the credit card route no joy there.
The problem is that no one would pay for a snake up front trust me on that one I have kept snakes for 25yrs and know how it all works :lol:

 

[gordonthegofor]

[/quote]
The problem is that no one would pay for a snake up front trust me on that one I have kept snakes for 25yrs and know how it all works :lol:[/quote]

When I started building stairs I could not afford the materials and asked for a 50% deposit on order and was amazed at the amount of customers that were willing to part with this, I now require a 10% payment on booking

If you have this reputation for sourcing reptiles I would think customers would be willing to pay up front when ordering

start small and build slowly

 

[Jason]

The problem is that no one would pay for a snake up front trust me on that one I have kept snakes for 25yrs and know how it all works :lol:[/quote]

When I started building stairs I could not afford the materials and asked for a 50% deposit on order and was amazed at the amount of customers that were willing to part with this, I now require a 10% payment on booking

If you have this reputation for sourcing reptiles I would think customers would be willing to pay up front when ordering

start small and build slowly[/quote]
Snakes are not stairs though and I have tryed to ask for deposits but snake people are a differant thing altogether.
As for starting small I am it's just that how small can you start? Buying at trade prices you have to buy in £k's

 

[DuaneJackson]

One other point is that the Reptile shop in our town is within half a mile from me but the owner of that has upset all his customers with his rude attitude and so I get call's from most of them asking for stuff that I just don't have the money to buy in.

You mentioned you had a plan to open a shop. Why are you not going this route? Is the shop above for sale? Ask. If he's annoyed a lot of his customers then I'm sure I new owner could improve the shops current turnover.

As Nigel said, it's easier to raise 1k than 5k. But sometimes it's easier to raise 50k than 5k if the business opportunity is a different one.

Don't write off this idea straight away, give it some serious consideration..... then write it off : )

 

[Jason]

One other point is that the Reptile shop in our town is within half a mile from me but the owner of that has upset all his customers with his rude attitude and so I get call's from most of them asking for stuff that I just don't have the money to buy in.

You mentioned you had a plan to open a shop. Why are you not going this route? Is the shop above for sale? Ask. If he's annoyed a lot of his customers then I'm sure I new owner could improve the shops current turnover.

As Nigel said, it's easier to raise 1k than 5k. But sometimes it's easier to raise 50k than 5k if the business opportunity is a different one.

Don't write off this idea straight away, give it some serious consideration..... then write it off : )

He won't sell the shop.
I have wanted a reptile shop for about 15yrs but it's just not an option at the moment and that is why I run it from home.

 

[SuffolkDesigns]

I don't see the problem in getting deposits for special orders. It would also increase your chance of getting investment.

How would your investors feel if you ordered 5k's worth of stock for clients that had ordered them and they all cancelled for one reason or another ? You would then be stuck with stock that requires more expense to keep.

 

[confused]

I agree totally with what vshosting said, if any of my customers want something, then they pay wither a deposit or the full amount, as mentioned, what if you go and buy a snake or equipment for £5000 for someone then they turn round and say they dont want it ? From what I have read on this post, it would seem that it would leave you even more in the mud.
Is there no chance the bank will extend your loan if there isnt too much left to pay.

 

[clairemackaness]

My customers all pay me a 25% deposit on order so that I can get the materials required to do the job.

Why not ask your suppliers to open a credit account with them, you can ask for a depoist from your customer, pay the supplier a small amount. Get the snake, send to costomer, receive final payment and then settle up with supplier.

I'm sure if you were honest with your suppliers and explained your predicament they could think of a solution for you.

I do feel for you though, I'd love to rent a studio and work full time but the bank wont touch me as I also have a poor credit rating caused by redundancy and nasty split from my ex. If an investor came along right now I'd be delighted!

 

[Cornish Steve]

Tying some of these ideas together with information you posted earlier, why not go after the high-end market (£5K and up) for which the profit margin is 200% and ask for a deposit of 33%? In other words, the deposit equals your cost. Maybe I'm being too simplistic, but it seems reasonable to charge a 1/3 deposit. To get things going, you'd need to trade on your reputation and experience.

 

[TechFox]

Are you still seeking funds?

 

[Jason]

Are you still seeking funds?

Yes I am still looking for funds

 

[Faith28]

Sorry if I'm just being naive about this, but have you tried businesslink. If you are having problems obtaining funds they should be able to give you advice.

I am based in East London and understand that our enterprise agency(East London Small Business Service) give £1000 grant when we produce a business plan and show we have a first contract/client.

Plus we get the opportunity to take out low interest (or even no interest - only admin fee payable) if some people are unable to take out a conventional loan.

You should also get a business advisor who will give you further info as you need it.

I think its www.businesslink.gov.uk . Just call them and they will tell you your local enterprise agency.

As an aside, I went and applied for a grant from www.unltd.org who have given me about £5k to develop my business. But they specialise in 'social enterprises'.

I really hope you get your funds so that you can move on with the business. Please keep us informed.

Eiman

 

[Faith28]

That's www.unltd.org.uk