Sources for some business funding

[fridaypassion]

So we have got the lovely to have issue of having a thriving and growing business and pretty much constant cashflow issues as a result!

I want to inject about 35k into the business to buy some stock and possibly a company van.

The one thing I've not done yet is raise money against my own house. We have about a 50% LTV but Santander are setting us up for some major hoop jumping when I approached them. We are proceeding down this route for now.

Their additional lending rate is 4.9% so the question is are there any other sources we should be looking to? We have no debt in the business and fixed assets/stock at about 100k. I dont want to go down the investor route in terms of giving up shares although it might make an attractive proposition for someone wanting a bit more of a return on a lump of cash.

Any other ideas?

[AndrewCrown]

You might want to look at Peer to Peer lending. Make your business case and see what happens.... Plenty of diferent types to look at: Try Funding Circle etc.

fridaypassion said:

So we have got the lovely to have issue of having a thriving and growing business and pretty much constant cashflow issues as a result!

I want to inject about 35k into the business to buy some stock and possibly a company van.

The one thing I've not done yet is raise money against my own house. We have about a 50% LTV but Santander are setting us up for some major hoop jumping when I approached them. We are proceeding down this route for now.

Their additional lending rate is 4.9% so the question is are there any other sources we should be looking to? We have no debt in the business and fixed assets/stock at about 100k. I dont want to go down the investor route in terms of giving up shares although it might make an attractive proposition for someone wanting a bit more of a return on a lump of cash.

Any other ideas?

[STURBO]

I'd take all I could at 4.9% if the fees aren't too high.

Unlikely to get better than that.

I'd also consider contract hire for the van as to improve your cashflow.

[foliedouce]

Are you B2B or B2C?

If B2B the an invoice financing facility could work.

Can you adjust / negotiate supplier payment terms? This may also help depending on the nature of your business.

[spikeyhead]

Lease the van.

Start buying stock on a credit card, but pay it off before you have to pay any interest. If you've got regular suppliers for some items then see if you can push their credit terms out.

[fridaypassion]

We have a funny little business really some is B2B some B2C. The main stock I'm buying is cars so it's quite cash hungry and limits things like credit cards as I'm normally buying from private individuals. We will carry on with the bank. The income is no issue it's just the dreaded affordability and any other reason they can think of not to lend!

[JimmyConwayNW]

Friday with nextgear stock funding you can buy cars privately not just at auction. May work for you.

[fridaypassion]

Thanks Jimmy I wasn't aware of that. Will investigate.

Edited by fridaypassion on Friday 20th February 22:16

[JimmyConwayNW]

You can buy stock in and use it to fund px cars they just lend up to a percentage of Guide.

Contact them and get a rep out can always have it in place and use it when you need it or if the right car comes along when cash flow is tight.

[bob-in-toon]

Completely dependant on where in the country you're located but there are the jeremie funds (European money) which can provide funding. But they only apply to regions which are classified as being economically deprived - the NE for example.

[fridaypassion]

Its well deprived around here (Yorkshire) Could be worth looking into

[bob-in-toon]

You are in luck then. Drop me an email and I can inform you further [e-mail]

[rfoster]

I could help with the lease or finance of a van for you if you decide to go down that route, happy to put some figures together if there's anything specific you're looking for. Cheers, Richard (Meridian Finance)

[fridaypassion]

Cheers Richard. We are already acquainted (Lotus Jon)

[RJD223]

Try going to your business bank.

We got a really cheap deal on a £30k loan (used for expanding/cashflow) from NatWest under The Funding for Lending Scheme ( http://www.bankofengland.co.uk/markets/Pages/FLS/d... ).

Setup fee was Zero and rate was very, very good over 3 years.

Might be worth a question!

Cheers,

Rick.

[fridaypassion]

Thats another one to look at Rick cheers. We are at the typical what I call dragons den stage. If I went in the Den we'd have 5 offers as we are already doing well and now want to scale. Simples. As an update Santander wont allow us to have additional lending on the house as they need an additional year of accounts. No flexibility on this despite us having up to date accounts until Jan 1st this year showing more than a doubling of net profit year on year (previous year was 10 x year before etc)

We have an offer of a secured loan at 5.9% so thats the number to beat at the moment. 2.5k fees on that one...gulp. We still own all the business though so still cheap money really I guess.

[Mr Overheads]

fridaypassion said:

We have an offer of a secured loan at 5.9% so thats the number to beat at the moment. 2.5k fees on that one...gulp. We still own all the business though so still cheap money really I guess.

If the fees are 2.5k then the true rate is higher than 5.9%. i.e. need to factor in total fees and total interest over the total term.

It's probably still cheap money. If you were looking to borrow money via p2p lending e.g. rebuildingsociety.com, funding circle et al then you would be looking at over 10%, unless you really managed the auction well and got family, friends, local HNW investors to bid on your loan and get the rate down. Maybe loads of PH'ers would bid at 4.9%, if we all bid say £100 you would have the money quite quickly and the p2p platform would handle all the admin.

[rfoster]

fridaypassion said:

Cheers Richard. We are already acquainted (Lotus Jon)

Ah! in that case - forget it

[fridaypassion]

Mr Overheads said:

If the fees are 2.5k then the true rate is higher than 5.9%. i.e. need to factor in total fees and total interest over the total term.

It's probably still cheap money. If you were looking to borrow money via p2p lending e.g. rebuildingsociety.com, funding circle et al then you would be looking at over 10%, unless you really managed the auction well and got family, friends, local HNW investors to bid on your loan and get the rate down. Maybe loads of PH'ers would bid at 4.9%, if we all bid say £100 you would have the money quite quickly and the p2p platform would handle all the admin.

Thats one angle I hand't thought of as well. The only issue there is how long it takes to get together and also the fees for these sites are quite high as well I believe? We need to gt everything in place ASAP really ready for our main sales season kicking off in April. Maybe something like that if we had a second round could be doable but I think at the moment we have enough on our plate with a busy year planned!

[RJD223]

This is the deal we got through Funding for Lending scheme:

Amount : £30,000
Term : 3 years
Interest rate : Fixed at 4.19% **** - indicative only - the precise rate will be confirmed on the date of draw down
Monthly Repayment : approx £888.07 per month
Loan fee : £ Nil ****
Bank Legal Costs :

Mortgage Debenture - £350.00
Guarantee - £175.00

Edited to add: The rate was exactly 4.19% when we drew it down.