raising finance
Discussion
I have a company which owns a taxi firm, a carwash, and several properties. There are two other small taxi firms I'd like to buy and add to the one the company owns. I need to borrow about £200k towards the purchase of the two firms, at about 6% fixed over about 10 years, and preferably without early redemption charges. My bank (RBS corporate) doesn't do lending. Actually I think it's bust. But does ANY institution lend on this type of deal?
Edited by groak on Saturday 8th December 00:46
That's a big chunk of cash. I wouldn't imagine any bank will lend that sort of money right now.
How risk averse are you?
I did a couple of risky property developments a few years ago, but things were better then...I signed up for a number of credit cards to raise the finance for them of around £100k. It was a bit scary having that amount of borrowing across 8 credit cards, but things went ok, and I was able to re-mortgage once the properties were finished 5 or 6 months later, and pay off the cards.
Might be a way for you.
How risk averse are you?
I did a couple of risky property developments a few years ago, but things were better then...I signed up for a number of credit cards to raise the finance for them of around £100k. It was a bit scary having that amount of borrowing across 8 credit cards, but things went ok, and I was able to re-mortgage once the properties were finished 5 or 6 months later, and pay off the cards.
Might be a way for you.
JQ said:
Handelsbanken, Aldermore or Santander might be worth a try. They are certainly lending at the riskier end of the property market.
No property is involved in this deal, other than as security. It's two taxi firms I need the money to buy. They'll add 70 drivers or £7k a week to the existing taxi firm's income, and cost roughly half that to earn it. Local Handelsbanken isn't much use, but I'll try the other two, though Santander sounds like timewasting too.
Ray Luxury-Yacht said:
That's a big chunk of cash. I wouldn't imagine any bank will lend that sort of money right now.
How risk averse are you?
I did a couple of risky property developments a few years ago, but things were better then...I signed up for a number of credit cards to raise the finance for them of around £100k. It was a bit scary having that amount of borrowing across 8 credit cards, but things went ok, and I was able to re-mortgage once the properties were finished 5 or 6 months later, and pay off the cards.
Might be a way for you.
The deal doesn't involve any risk at all, really. Just merging two smaller taxi firms into a much larger one. If anything, the merger will benefit everyone in the smaller firms, and I'm sure earning more won't be a problem to any of their personnel. That's it, really. I need about £300k to do everything the deal requires, and don't want to allocate more than £100k of current funds to it. But hey ho, I suppose the institutional ex-lenders can come up with all kinds of reasons why it's risky/shady/not for them etc etc etc. How risk averse are you?
I did a couple of risky property developments a few years ago, but things were better then...I signed up for a number of credit cards to raise the finance for them of around £100k. It was a bit scary having that amount of borrowing across 8 credit cards, but things went ok, and I was able to re-mortgage once the properties were finished 5 or 6 months later, and pay off the cards.
Might be a way for you.
Don't think multiple maxed out credit cards are the way forward. And actually, private money is available. But I don't think private money will like the '10 years' bit. I lend money myself, and I want the returns a LOT faster than that.
Edited by groak on Saturday 8th December 01:27
GTIR said:
Is that money to buy the Hackney licences and vehicles?
No, they're private hire firms. But I believe half a dozen or so cars come along with one of them. Very basically, there's a local industry calculation of 'five grand a driver' when these places change hands. You get the phone lines, the contracts, and the drivers. Probably nothing a bank understands as 'security', but then they're not really in the business of making profit, are they? (Personally I miss the 'good old days' when the bank was like a financial partner in a moneymaking scheme. Bet the taxman does too...)If you've sufficient personal monies invested you could look at portfolio lending against that, then directors loan into the business to do the deal. About £300k on 70% LTV.
You'd need a decent sized Private Bank to sort it out. As you need portfolio management and lending facilities in one place. Can be cheap to, 2% over base, but variable.
You'd need a decent sized Private Bank to sort it out. As you need portfolio management and lending facilities in one place. Can be cheap to, 2% over base, but variable.
[quote=Countdown]Do the Tax Returns from the two companies you're interested in buying verify that the income would cover loan repayments ?[/quote
Whilst a bank might well ask such a question, the reality is that as the small firms are merged into our large one, the bulk of their overheads disappear. That skies the nett from their asset addition. It's not hard to understand, but it's not possible to demonstrate from historic records.
Whilst a bank might well ask such a question, the reality is that as the small firms are merged into our large one, the bulk of their overheads disappear. That skies the nett from their asset addition. It's not hard to understand, but it's not possible to demonstrate from historic records.
groak said:
Countdown said:
Do the Tax Returns from the two companies you're interested in buying verify that the income would cover loan repayments ?
Whilst a bank might well ask such a question, the reality is that as the small firms are merged into our large one, the bulk of their overheads disappear. That skies the nett from their asset addition. It's not hard to understand, but it's not possible to demonstrate from historic records.Having said that, in my experience I've yet to see a set of official accounts for a taxi firm that is anywhere near an accurate representation of the cash going in and out
JxT said:
6% fixed? No security for the loan?
Not going to happen, sorry.
Well the company owns a carwash on a primesite and 6 other properties - all unburdened. But I suspect your last sentence is the most likely reality.Not going to happen, sorry.
It'll end up with private money. And The Bank of Paranoia will miss out on another tiny but meaningful bit of rock solid potential profit.
Countdown said:
groak said:
Countdown said:
Do the Tax Returns from the two companies you're interested in buying verify that the income would cover loan repayments ?
Whilst a bank might well ask such a question, the reality is that as the small firms are merged into our large one, the bulk of their overheads disappear. That skies the nett from their asset addition. It's not hard to understand, but it's not possible to demonstrate from historic records.Having said that, in my experience I've yet to see a set of official accounts for a taxi firm that is anywhere near an accurate representation of the cash going in and out
Two modern private hire firms with 60 drivers between them probably don't make their owners very much if any profit at all once overheads are paid. But adding 60 drivers to an existing system like ours makes a substantial additional income from weigh-ins alone, without creating much additional cost.
This is (one of) the problem(s) with institutional borrowing. To a bank, we're looking to borrow to buy a couple of unprofitable (according to their historic records) small 30 car firms. And okay, a child of average intelligence can understand why, and what we have to gain from it, but a post-credit crunch banker probably can't.
Edited by groak on Sunday 9th December 17:10
otherman said:
Why not try a credit union, like funding circle. They're cheaper than banks as well.
Hmmm. I've always associated credit unions with small and personal money dealings. Didn't even realise they were interested in commercial lending. It's only the price of a call to find out I suppose..... Gassing Station | Finance | Top of Page | What's New | My Stuff