Business Overdraft/Loan with bad credit history

I understand your predicament but it is not unusal. High street banks normally don't like to lend money to start ups especially when there is a history of problems.

I therefore suggest that the best/cheapest option you have is to leverage the equity you have in your home - even though I am reluctant to advise anyone to use their home as security for a business loan. However, please ensure that your business plan is robust and can meet the repayments.

Please also send me your business plan to me by email and I'll have a look for other options available to you.

In the meantime, you can get a second charge loan quote using the link below:

http://www.choice-finance.co.uk (this website is affiliated to my company)

There are no upfront fees or valuation costs involved and the lender will accept applicants with credit problems.

Regards,

Joel

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Cvines.

I would agree that financing on your property is probably going to be the cheapest route until you can generate enough income from your business to self finance your growth. The fact you are a partnership makes it irrelevant if you borrow on the house or with a business loan, the same risks apply to you persoanlly. With CCJs any source of debt is going to be pretty expensive, including your mortgage. Based on a rather healthy sounding £230k T/O with more orders than you can deal with, you are presumably are generating significant amounts of cash within the business. If you aren’t generating cash then you need to look carefully at why this is. My initial gut reaction is that if you can’t raise £10k internally then something is wrong with the way you are managing your cash flow unless your growth plans are very ambitious. One thing that immediately leaps out is that you say you are running as a simple partnership. Presumably your accountant has spoken to you about incorporating as this will not only save you tax but creates significant cash flow savings in terms of the timing of the tax payments. This alone may produce enough funds for your needs as there are no payments on account to make for small ltd co.s

I personally would have a long hard look at self financing the growth using re-invested funds (again a company is extremely helpful here as you only get taxed 19%) before taking on debt or increasing the mortgage on the house. Any new debt should be phase II after you have got your business in order.

If you don’t have any proper financial help then I would be pleased to have a chat about your circumstances and see if there is some room along the above lines to grow from your own resources.

Regards,

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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773

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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT

We have been offered a personal loan by the Southern Pacific Personal Loans Ltd through "The Loan Department, The Loan Clinic".  For £15,000 loan over five years they have offered us a loan at 12.7% apr letting us self-certify our earnings (we only have one years accounts and have only worked full-time in business for 6 months when we generated most of the sales) and have took into account one satsified CCJ. 

Just wondered if anyone out there can reassure us that this is a reputable company.  We note that they do not seem to be FISA registered so it has made us a little cautious.