Buying a business help!

[FrankieHair]

Hi all!

I'm returning to this site after a bit of a gap as I need some advice.

So the background is, I've been looking at buying a salon over the next few years, but the opportunity to buy an existing business has come up. It's a very good opportunity but has come up a bit earlier than planned.

The issue is I have 50% of the asking price (£20k) from personal and investors.

I need to raise the other half, i don't own a house so it's just down to my existing money, my experience and a business plan.

My question is what is likelihood of me getting a business loan for the rest with no assests? How much would I need to ask for as I would need more than just the asking price ?

 

[BannerPenguin]

Super super slim sad to say.

 

[FrankieHair]

O :-(

So would it be safe to say if you are buying a business you need the full amount up front or need to own your own house?

 

[BannerPenguin]

In my modest opinion yes. Think of it this way.

A stranger walks up to you and says I have no assets to secure my loan against will you give me £20k?

What would you say?

They need protection against any lending nowadays. It's a reason why the country got into a recession. The banks lent out money it couldn't afford to and when no one could pay it back it's left them short and caused problems.

 

[virtues2011]

Try the Nat West business advisors. They are good for business loans up to 25k and tell you within 24 hours if you have been successful. I got one from there with no knowledge of hairdressing but a good business plan and projections. I had no trouble whatsoever. They are all subject to credit checks though but a good income and your own property will go in your favour without either of these you may struggle. Don't rule out a guarantor either you can still get a loan this way through a bank.

Sent from my GT-N7100 using SalonGeek mobile app

 

[FrankieHair]

Thank you very much.

I've done a lot of research and some allow personal loans to be used too.

It's such a good opportunity I hope the bank can help out, I may have some a guarantor and some borrowed money from family too! After all it all helps!

 

[Lala12]

NatWest also offers an Enterprise Finance Guarantee Loan for businesses which can't obtain finance due to lack of security. The loan is partly underwritten by the Government for an extra 2% per annum. Other banks might also offer it. Usual credit searches, etc. will apply.

You will need a sound business plan and cash flow forecast to show that the business can service the debt.

Good luck.

 

[FrankieHair]

Thank you,

This is the sort of thing I've been looking at, they favour in business that offer education, I would be buying a salon with 2 apprentices, and part of my business plan is expanding the area of training.


I'm not giving up hope yet!

 

[Vinnsense]

Hi there,

We we're kind of in the same position but we have a property but they wouldn't secure the loan against it due to not 80%.

We ended up going with creation finance, downside was it's 15% which is a rely crappy rate; but given your situ I don't think u have much choice.

Just make sure you don't get ripped off, and remember you need to have a couple of months rent / bill money "just in case".

Good luck and let us know how you get on.

Dean

 

[FrankieHair]

Did you only attempt to apply for a secured business loan?

 

[Cholo]

I've just posted this on another thread but you can borrow up to £10k via www.get-started.org - 6% interest and 12 month payment holiday too, I think.

It's a government funded initiative providing start up support and you will have a named mentor. You will need to produce a business plan however the mentor helps you with this.

Most of the banks do offer small loans up to £25k as it is part of the governments initiative to promote entrepreneurship.

HTH

 

[Spa Therapist]

Hi there,

We we're kind of in the same position but we have a property but they wouldn't secure the loan against it due to not 80%.

We ended up going with creation finance, downside was it's 15% which is a rely crappy rate; but given your situ I don't think u have much choice.

Just make sure you don't get ripped off, and remember you need to have a couple of months rent / bill money "just in case".

Good luck and let us know how you get on.

Dean

15%?? oh my goodness, my mortgage is only 2.49%!!