Loan as LTD company with no trading history?

[WHARTY]

Hi. What are the chances of me getting a loan as a LTD company with no trading history?

Thanks

Lee

 

[Scalloway]

Do you have security to put up?

 

[WHARTY]

House and cars?

 

[akirk]

you will have to put up director's guarantees - if you have the assets, there will probably be no problem.

I would always caution against putting up personal assets as a guarantee - maybe look as to why you need the loan?

Alasdair

 

The bank will look for bricks & mortar security - they will also look for pretty good equity to secure against.

I agree and disagree with akirk.

Agree - why do you need the money - is it nnecessary / vanity

If the money is for genuine business development then, frankly you must commit to succeed....

 

[akirk]

The bank will look for bricks & mortar security - they will also look for pretty good equity to secure against.

I agree and disagree with akirk.

Agree - why do you need the money - is it nnecessary / vanity

If the money is for genuine business development then, frankly you must commit to succeed....

not sure that we would be in disagreement

however we see a lot of comments on here where people have issues because of personal guarantees in businesses which are in problems...

I would always advise to start from the point of personal guarantees not being the correct route - and then move to using them only when there is a strong business case and no alternative...

a lot of businesses will borrow money / spend money where really it is not necessary - are offices required / do you really need that expensive computer / phone / car / etc. and sometimes cutting back on that means a business low in debt which is therefore more stable and more likely to survive in tough times

a high % of business fail due to cash flow / under capitalistation and this can mean two things - don't take out a loan = tougher cash flow with repayments etc. / do take out a loan = better capitalisation

the decision is individual for each business, but should always start with an intention of committing as little as possible...

on the basis that the OP syas this is a business with no trading history - unless there is a reason (which there may be) then I would counsel against loans - esp. when personal assets may be needed as security...
it is also worth bearing in mind that if there is a mortgage then the house may not be available as an asset for this purpose and cars are often valued at a fire-sale price for this purpose.

Alasdair

 

[Williams lester]

Hi. What are the chances of me getting a loan as a LTD company with no trading history?

Thanks

Lee

Get a business plan together, your accountant should be able to help with this. You can then see whether you actually need the loan, how much you need and how you will repay it. You should also be able to forecast and flex the figures to give scenarios based on expected levels of sales to work out if this is a worthwhile exercise.