Business loan for new venture, advice please
Discussion
I want a career change, but seeing as I'm not qualified for anything at all, it's proving quite difficult.
Looking through job websites for alternitive careers is depressing - I would actually have to be a pharmacist or junior doctor, chartered accountant or basically a seasoned and very well educated professional of some sort to earn near the sort of money I earn now. I have bills so couldn't really afford to drop much in wages to train for something new.
I've come to the conclusion my only option is to start a new business and work for myself, however any of my ideals would cost a bomb to get off the ground so a business loan is perhaps the only option.
I have a limited company through which I provide my contracting services to teams/companies I work for, so maybe this is a good starting point to ask for business finance.
does anyone have experience of gaining a business loan successfully for a new venture? How comprehensive does your business plan need to be? Do you need provisional orders or concrete deals or contracts, or can you simply present your ideas to the bank with some financial forecasts?
I appreciate this may not be the best forum to ask these questions on but there does seem to be plenty of company director types on here who may have some advice
Thanks
Ghost.
Looking through job websites for alternitive careers is depressing - I would actually have to be a pharmacist or junior doctor, chartered accountant or basically a seasoned and very well educated professional of some sort to earn near the sort of money I earn now. I have bills so couldn't really afford to drop much in wages to train for something new.
I've come to the conclusion my only option is to start a new business and work for myself, however any of my ideals would cost a bomb to get off the ground so a business loan is perhaps the only option.
I have a limited company through which I provide my contracting services to teams/companies I work for, so maybe this is a good starting point to ask for business finance.
does anyone have experience of gaining a business loan successfully for a new venture? How comprehensive does your business plan need to be? Do you need provisional orders or concrete deals or contracts, or can you simply present your ideas to the bank with some financial forecasts?
I appreciate this may not be the best forum to ask these questions on but there does seem to be plenty of company director types on here who may have some advice
Thanks
Ghost.
Edited by Ghost91 on Saturday 12th September 15:06
Thankyou4calling said:
How much do you need?
Friends and family plus credit card perhaps.
My friends and family unfortunately are all skint, so that's not an option. Friends and family plus credit card perhaps.
I do have a business overdraft and credit card amounting to 10k in total, so it's crossed my mind to dip in to this depending on what my accountant thinks.
I would need a small industrial unit which can be funded by me working to start with - it will need kitting out with equipment and I could possibly get things up and running from as little as 5k however to start making the real money I need one very expensive piece of equipment c.25-40k, and a large materials bill.
I would like to think I could kick things off small with 5k and build up to buying said piece of machinery once things are ticking along but my fear is that will require too much time and not give enough returns for me to give up work and focus on it completely. Profits once the expensive equipment is purchased go through the roof.
Wilmslowboy said:
I'd be surprised if you get get a business loan to buy equipment for a business without trading history
However can you not lease/ rent the "expensive equipment" ...or get a personal loan (based on your existing circumstances)
Well I have been trading as a ltd company working freelance for 3 years so perhaps this might go in my favour? Or perhaps I will have to strongly consider starting off smaller and hoping I can make enough to dedicate my full attention to making it work. However can you not lease/ rent the "expensive equipment" ...or get a personal loan (based on your existing circumstances)
There aren't any lease or rent plans that I can find, it's quite specialist stuff usually bought by big companies with plenty of cash. Personal loan may be viable in time, but as it stands my lack of existing credit means I don't have the best credit rating - I'm taking steps to improve this.
Thankyou4calling said:
What are you looking to do? I've sneak contacts who loan on equipment purchases.
Is the kit available used?
Used is where I'm basing the 25-40k figure on, brand new would be silly money. It's a reasonable sized 'autoclave' I'm after which has a chamber with vacuum connections which can pump in heat and create high pressure to cure composite components. Is the kit available used?
DSLiverpool said:
If someone locally has the machine ask if it's used 100% of the time, if not then rent it at their place. We used to do this with our CNC miller to a few local tool shops that didn't have a large bed.
This is a great suggestion and definitely something I've considered - however to win the work, companies will expect you to have these facilities in house in this case, so while it might be okay for a while I would struggle to win decent steady contracts with lack of facilities Edited by Ghost91 on Saturday 12th September 15:56
Ghost91 said:
DSLiverpool said:
If someone locally has the machine ask if it's used 100% of the time, if not then rent it at their place. We used to do this with our CNC miller to a few local tool shops that didn't have a large bed.
This is a great suggestion and definitely something I've considered - however to win the work, companies will expect you to have these facilities in house, so while it might be okay for a while I would struggle to win decent steady contracts with lack of facilities It's possible to get a angel to buy it for you and they own it whilst you repay it, on a smaller scale I have done this with a computer and large scale printer for a friend who wanted to start as a graphic designer. He had 35% of the cash! I paid the balance but owned the entire machine until he paid me back (no interest as it was a mate but I wanted security so we didn't fall out)
DSLiverpool said:
Start up measure only, once biz model proven you go balls out to get one. Contact the maker, distributor etc to advise if any come on the market.
It's possible to get a angel to buy it for you and they own it whilst you repay it, on a smaller scale I have done this with a computer and large scale printer for a friend who wanted to start as a graphic designer. He had 35% of the cash! I paid the balance but owned the entire machine until he paid me back (no interest as it was a mate but I wanted security so we didn't fall out)
It's certainly an option and you make a good case. If I could manage to win the work without the facilities in house, then I could use equipment at the local firm where I was a trainee 6 years ago (if they'd let me of course!), which would help to kick things off. It's possible to get a angel to buy it for you and they own it whilst you repay it, on a smaller scale I have done this with a computer and large scale printer for a friend who wanted to start as a graphic designer. He had 35% of the cash! I paid the balance but owned the entire machine until he paid me back (no interest as it was a mate but I wanted security so we didn't fall out)
The thing is, I'd be dealing with quite big organisations who expect you to have the facilities to do the job. It might be possible to get the work without to start off with but It would be tough selling that to the customer
Edited by Ghost91 on Saturday 12th September 16:15
I assume it's a skilled job? The big firms want consistent quality work, be honest, sell yourself and the fact you have to do a good job as it's your new livelihood.
I assume (!) the buyer will understand the process and will probably empathise with you - they want good suppliers, you will be one.
Do you need any liability insurance etc ?
I assume (!) the buyer will understand the process and will probably empathise with you - they want good suppliers, you will be one.
Do you need any liability insurance etc ?
Ghost91 said:
DSLiverpool said:
Start up measure only, once biz model proven you go balls out to get one. Contact the maker, distributor etc to advise if any come on the market.
It's possible to get a angel to buy it for you and they own it whilst you repay it, on a smaller scale I have done this with a computer and large scale printer for a friend who wanted to start as a graphic designer. He had 35% of the cash! I paid the balance but owned the entire machine until he paid me back (no interest as it was a mate but I wanted security so we didn't fall out)
It's certainly an option and you make a good case. If I could manage to win the work without the facilities in house, then I could use equipment at the local firm where I was a trainee 6 years ago (if they'd let me of course!), which would help to kick things off. It's possible to get a angel to buy it for you and they own it whilst you repay it, on a smaller scale I have done this with a computer and large scale printer for a friend who wanted to start as a graphic designer. He had 35% of the cash! I paid the balance but owned the entire machine until he paid me back (no interest as it was a mate but I wanted security so we didn't fall out)
The thing is, I'd be dealing with quite big organisations who expect you to have the facilities to do the job. It might be possible to get the work without to start off with but It would be tough selling that to the customer
Edited by Ghost91 on Saturday 12th September 16:15
DSLiverpool said:
I assume it's a skilled job? The big firms want consistent quality work, be honest, sell yourself and the fact you have to do a good job as it's your new livelihood.
I assume (!) the buyer will understand the process and will probably empathise with you - they want good suppliers, you will be one.
Do you need any liability insurance etc ?
It is skilled, allegedly... I assume (!) the buyer will understand the process and will probably empathise with you - they want good suppliers, you will be one.
Do you need any liability insurance etc ?
I would imagine various insurances would be wise especially if it gets to the stage where I need to get some contract workers in
I think that to get the ball rolling, I'm going to have my mother in law make a website for me (knew she would be useful for something one day!) and try to get in some simple work that won't require any machinery or expensive equipment, that way if I win some work I can then try and get some workspace together quickly and cheaply, and build up from there.
It's all very scary and exciting for me, but there's some serious cash to be made in the industry and I'm bored to tears of having no challenges any more in my day to day work!
It's all very scary and exciting for me, but there's some serious cash to be made in the industry and I'm bored to tears of having no challenges any more in my day to day work!
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