Where to go for a start up loan?

Hi there,

I'm having trouble with finding a business loan! I would like to borrow £25,000 but the banks I have spoken to so far want a contribution of at least 30%. Can anyone give me some advice or know anywhere to go to?

Thanks in advance!

What security can you put up against the loan?

Steve's question is the right one. I work as a commercial finance broker and start up loans is one of our specialist areas and any of our lenders will want security. This could be equity in your own home or other property you own, the value of any assets owned by you or the business. If you have an income outside of the business then an unsecured personal loan may be a possibility.

It's the high street banks that tend to ask for some level of matched funds but there are other lenders that aren't so strict. But they will need some kind of fallback ie security

Steve's question is the right one. I work as a commercial finance broker and start up loans is one of our specialist areas and any of our lenders will want security. This could be equity in your own home or other property you own, the value of any assets owned by you or the business. If you have an income outside of the business then an unsecured personal loan may be a possibility.

 

It's the high street banks that tend to ask for some level of matched funds but there are other lenders that aren't so strict. But they will need some kind of fallback ie security

So not only do they want the client to match fund & pay interest, they also want to take your house and sell off at auction if things go wrong. Its a crappy deal for SME's.

This is precisely why the entire business banking sector is corrupt.

Luckily its changing slowly with crowd sourcing and peer to peer lending cutting out the greedy middleman but really the banks should take a long hard look at themselves and govt should push these high street cowboys to lend.

---------- Post added 18-12-2014 at 14:18 ----------

Entrepreneurs are required to boost the economy, its not about profiteering, risk assessment, underwriting and all these terms the financial sector uses to justify greed. It's a much wider societal need.

So not only do they want the client to match fund & pay interest, they also want to take your house and sell off at auction if things go wrong. Its a crappy deal for SME's.

 

This is precisely why the entire business banking sector is corrupt.

 

Luckily its changing slowly with crowd sourcing and peer to peer lending cutting out the greedy middleman but really the banks should take a long hard look at themselves and govt should push these high street cowboys to lend.

Hang on there ubermaus.

It's because the banks lent to customers without security that we ended up in the financial mess last time around. Even peer to peer lenders want security for higher risk loans...and quite rightly too.

The alternative is high interest rates to offset the higher risk of borrowers defaulting on their repayments...it's called payday lending and I bet you have similar views about that market too!

Even crowd sourcing sites, like Kickstarter, have stringent financial checks in place before accepting a campaign on their site.

Hang on there ubermaus.

 

It's because the banks lent to customers without security that we ended up in the financial mess last time around. Even peer to peer lenders want security for higher risk loans...and quite rightly too.

 

The alternative is high interest rates to offset the higher risk of borrowers defaulting on their repayments...it's called payday lending and I bet you have similar views about that market too!

 

Even crowd sourcing sites, like Kickstarter, have stringent financial checks in place before accepting a campaign on their site.

Steve we ended up in mess because the banks were greedy and offered subprime mortgages. Bankers played with the markets and lost. Also we (public) in the UK bailed out the banks with public money. Then when the s@it hit the fan personal debts were called in. People lost equity in their homes etc.

My point is we match fund and share the risk of bank loans in that sense, additionally we pay back more than borrowings in the form of interest. My feelings are Business lending should be ring fenced because its important to start and grow SME for our economy.

Apparently there is a shortfall of 900000 people starting Businesses! the government knows it, Business leaders know it, banks are self-regulating so live in their own bubble. It has to stop at some point.

---------- Post added 18-12-2014 at 14:44 ----------

The alternative is high interest rates to offset the higher risk of borrowers defaulting on their repayments...it's called payday lending and I bet you have similar views about that market too!

.

Is this the only alternative? I would say this is the alternative for private groups and shareholders to line their pockets.

A bank isn't Greedy. It is the shareholders of the banks that are greedy. Those shareholders are pension funds, pension funds have members, those members are you and I...the (greedy?) consumer demanding the very best pension their money can buy!

Let me ask you direct...are you prepared to lend the OP £25000? You're clearly passionate about business (as I am ) and you think that the tax payer should be underwriting the risk. As you're a tax payer, why don't you underwrite the risk and take the 'middleman' (the Government) out of it altogether?

I know the answer will be no (and quite rightly too!); the risk of you losing your money for a paltry bit of interest in return is not worth it. These are the sorts of decisions that banks have to make on a macro scale. And the reason they need to take security is because we tax payers (greedy consumers!) are now insisting that the Banks repair their balance sheets...and to do this they have to have a secure asset to lend against.

A bank isn't Greedy. It is the shareholders of the banks that are greedy. Those shareholders are pension funds, pension funds have members, those members are you and I...the (greedy?) consumer demanding the very best pension their money can buy!

 

Let me ask you direct...are you prepared to lend the OP £25000? You're clearly passionate about business (as I am ) and you think that the tax payer should be underwriting the risk. As you're a tax payer, why don't you underwrite the risk and take the 'middleman' (the Government) out of it altogether?

 

I know the answer will be no (and quite rightly too!); the risk of you losing your money for a paltry bit of interest in return is not worth it. These are the sorts of decisions that banks have to make on a macro scale. And the reason they need to take security is because we tax payers (greedy consumers!) are now insisting that the Banks repair their balance sheets...and to do this they have to have a secure asset to lend against.

If the OP signed up to P2P lending and I signed up then I would be lending the OP money cutting out the middleman.

I would underwrite the risk by spreading investments across different accounts. There would be numerous other investors involved too at various levels of interest within a suitable fair range.

Let me ask you something else - how have banks got masses of reserves to lend / play with anyway? I believe they are using public / consumer money to make a bit on the side (profit) which they then distribute privately.

Your money does not exist, its just numbers in a computer or on a screen. They take someone elses money and give it to you. Banks don't create wealth despite what they claim.

---------- Post added 18-12-2014 at 15:48 ----------

Let me pose another question - if every Natwest customer decided to take out 'their' money today do you think Natwest has the money?

Hi there,

 

I'm having trouble with finding a business loan! I would like to borrow £25,000 but the banks I have spoken to so far want a contribution of at least 30%. Can anyone give me some advice or know anywhere to go to?

 

Thanks in advance!

Try here= http://www.startuploans.co.uk