New business finance

[colinrob]

Hi after some advice please, we are thinking of starting a new business bed and breakfast on a boat, the morning is on a 99 year lease and these on their own sell for around £140,000 the total purchase price for the boat and lease is £350,000, I would need to sell my house to make this work but only have £175,000 equity, l also have pension pots worth about £100,000, would it be possible to get a business loan for this type of business
Thanks in advance Colin

[PurpleMoonlight]

You might be able to purchase the mooring with the pension money and borrowing.

You might able to buy the boat with the home equity and borrowing.

[colinrob]

Do you know the best place for sorting pension and finance

[PurpleMoonlight]

Most high street banks will lend to a pension scheme for property purchase. You can used a SIPP or SSAS if your business is to be Ltd.

I don't know which would be best for a boat loan I'm afraid.

Who do you bank with personally, that might be a good place to start?

[colinrob]

Thanks for your help

[DonkeyApple]

Why do you need to buy the mooring at the outset and why such an expensive boat?

Surely better to rent a suitable mooring and birth a cheaper boat? Gross income lower but you'd not be selling your home and taking on massive debt while learning the ins and outs of the business and getting it established until everything is more suitably in place for a bigger play?

[Ozzie Osmond]

Yes, TBH I had a sinking feeling when I read OP. This project needs to be tested for viability before going "all in".

[DonkeyApple]

The amazing gift of AirB&B is that you can test the waters with just a Biffa bin and a porta-loo. And it has changed many buyers' expectations in regards to not expecting the breakfast element.

A conventional Thames houseboat, for example, wouldn't really lend itself to B&B if you're live-in as you could probably only have one guest at a time and if you aim for something much bigger so you can have 3/4 sets of guests then something they would soon learn is that there isn't anywhere on a boat where you can't be heard.

But if the personal dream is to live on a river boat and then partly subsidise the cost with some paying guests then that seems a different proposal and in many ways negates most things?

[colinrob]

thanks for your replies, going slightly different route now, want to buy a mooring that has an old but serviceable boat moored (currently used as B&B stayed there Saturday night) let the boat out as a holiday rental but still need to sort out a SIPP no need to sell my house (both boats in Same harbour

[Benjamin_01]

Yes of course there are. But a lender any lender that is will/should always consider what the company's risks and mitigants (if any) are. If any of their listed risks become deadly for the company, then the lender won't provide you the loan of course.

Now banks will hone in keenly on leverage ratios, because no lender wants to be the sole source of funding for the company. Therefore, banks will typically want the borrower to have a 3:1 debt to net worth ratio. Asset Based Lenders can stomach much higher leverage because they deeply study and lend specifically against the collateral (AR and Inventory).

Now you can also go online to an online loaning market and take a loan, pay attention to the interest rate of course. According to me, the online loan market Moneybanker is the best company to visit if you want to take an online loan. They provide you with a loan that fits your needs the most and it's much easier than you think. The website optimizes your ability to find the best loans that are available on the market and it makes the loaning proces as quick and simple as possible for you.

This is just a brief summary, I could go on forever, but I hope I have provided you with the information you needed.
Anyway good luck with your company, very nice initiative mate! :-)

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Edited by Benjamin_01 on Tuesday 29th November 13:55

Edited by Benjamin_01 on Tuesday 29th November 14:00