Hi all,
Just wondered if any of you guys took out a business loan to get started, or managed to get some sort of government grant, or have any help or advice on how to do so ?
I am wanting to get started up properly, and therefore need to get my 2391 under my belt, purchase a van, do some advertising, and get registered with Nic, Elecsa e.t.c, but unfortunately lack of funds are making it impossible to do so. I also have a very bad credit rating due to being foolish in my younger years, so im worried that will prevent me getting any kind of loan,
Any help or advice will be much appreciated.
Quite apart from the requirements for actually qualifying for any loan, even a government backed one, most of the "schemes" out there are not set out to financially benefit anyone except the scheme provider, or the scheme from which the money is coming.
The only scheme which is realistically of any use at all the the Enterprise Loan Guarantee (or whatever they call it today) - though it also has limitations in that the banks decide who gets it, they're unlikely to fund 100%, and will want collateral on any part of the loan which is not covered under the guarantee.
The reality of most government or EU finance is that only the very few qualify for grants, and most loans also have prohibitive requirements too, such as taking a hands on share in your business, to high interest. It is, in all honesty, cheaper and safer to fund start up requirement using credit cards, or perhaps an extension to any mortgage you currently have (higher risk than credit cards). You may well be able to fund some of your needs through an overdraft on your personal account too.
Training funding is unlikely, unless you are unemployed, and have been a while. Many start up "loans" also specifically exclude some types of capital purchase (or restrict them - e.g. van, would probably need to be less than 3 years old), and most definitely will not provide funding for ongoing commitments such as approvals fees.
In any case, any formal borrowing at all is going to need to be supported by a full business plan, market research, and a sales plan, showing exactly who your customers are going to be, where they are, and how much they'll pay - any existing customers or firm order you can get to corroborate your plan will help.
Given that you also have a poor credit rating - have you had a credit reference report recently??? - that will in all probability not help at all. Are you planning a sole tradership, or a partnership, or a limited company? That may have a different effect on things.
I think, realistically, there are maybe a couple of avenues you can explore for a loan, including PYBT, and a couple of charities who will lend where bank loans have been refused (but within the restrictions I mention above). The sad fact of this is that you really need to show a high degree of business initiative to have a chance, and with respect, given that you're asking this question, that probably isn't you.
Other avenues, which are probably more practical: Start out very small, and do whatever work you can for now, putting the profit away towards "proper" start up. Explore any borrowing options among friends and family. Look at how you can reduce all your outgoings at present in order to put some money away for start up.
Given the 1976 in your user name I'm guessing you're 34 or 5 just now. A lot would depend on your current circumstances too - such as married, homeowner, recent financial history, work history and so on. Either way, it is worth looking to get professional advice and help with preparing a plan - Business Link being the most accessible place for that -
www.businesslink.gov.uk
By all means, ask away - I'll give what advice I can.
