Small Firms Loan Guarantee Scheme and Business Bank Accounts
Discussion
Hi all,
Following on from my business plan thread - which has apparently been met with approval - the guy I'm dealing with at the bank has asked (he's very polite!) my permission to request a loan under this Government backed scheme:
http://www.rbs.co.uk/business/borrowing/g1/firms.a...
http://www.businesslink.gov.uk/bdotg/action/detail...
Seems like a handy thing to have with regard to the security backing, only issue I can see at this time is the 2% per annum charge by the BERR (DTI) on loan amount outstanding. Anyway I've asked him to apply so as to get an agreement in principal, then we can talk fixed/variable and term figures, but I guess the question is, is this a rasonable loan scheme (assuming the rates aren't laughable)?
My second point is about business bank accounts. These all seem like a complete rip-off, charging you to sneeze even! I want to open a separate account for the new business, but is there any compelling reason that it has to be an official 'Business Bank Account'? I s'pose if they tell me I can't have the loan if I don't have one of their accounts I won't have much choice.
Cheers,
Rob
Following on from my business plan thread - which has apparently been met with approval - the guy I'm dealing with at the bank has asked (he's very polite!) my permission to request a loan under this Government backed scheme:
http://www.rbs.co.uk/business/borrowing/g1/firms.a...
http://www.businesslink.gov.uk/bdotg/action/detail...
Seems like a handy thing to have with regard to the security backing, only issue I can see at this time is the 2% per annum charge by the BERR (DTI) on loan amount outstanding. Anyway I've asked him to apply so as to get an agreement in principal, then we can talk fixed/variable and term figures, but I guess the question is, is this a rasonable loan scheme (assuming the rates aren't laughable)?
My second point is about business bank accounts. These all seem like a complete rip-off, charging you to sneeze even! I want to open a separate account for the new business, but is there any compelling reason that it has to be an official 'Business Bank Account'? I s'pose if they tell me I can't have the loan if I don't have one of their accounts I won't have much choice.
Cheers,
Rob
Re SFLG scheme:
This can be very helpful. However, bear in mind that the DTI's "fees" (i.e. interest) is on top of the Bank's interest, so it's not cheap. However, it's a good safety net for a new business. We have one.
Re business bank accounts:
As you're taking out a loan, the bank concerned will specify that you should have a dedicated business account rather than a personal account. Some will give free services for the first year or two, so you may not need to worry anyway. Shop around if possible, but you may find you need to take the fees on the chin in order to get up and running.
You may also be required to have key man insurance to cover any loan amount not covered by the SFLG, plus a proportion of personal liability.
This can be very helpful. However, bear in mind that the DTI's "fees" (i.e. interest) is on top of the Bank's interest, so it's not cheap. However, it's a good safety net for a new business. We have one.
Re business bank accounts:
As you're taking out a loan, the bank concerned will specify that you should have a dedicated business account rather than a personal account. Some will give free services for the first year or two, so you may not need to worry anyway. Shop around if possible, but you may find you need to take the fees on the chin in order to get up and running.
You may also be required to have key man insurance to cover any loan amount not covered by the SFLG, plus a proportion of personal liability.
It will make your accounting a lot more easy if you have separate accounts. Of course, if it is a Ltd Co, you will have to.
Some business banks offer free banking for a year or two and others offer free banking as long as you keep a specific balance in the account.
The SBLG scheme is pretty good, and if you qualify that will give you protection that it will not be directly secured against your home.
Some business banks offer free banking for a year or two and others offer free banking as long as you keep a specific balance in the account.
The SBLG scheme is pretty good, and if you qualify that will give you protection that it will not be directly secured against your home.
Thanks for that info!
Incidentally my gf had arranged for the local Federation of Small Businesses rep. to come around yesterday (for her business) and they have an agreement with the Co-op bank for free banking for FSB members amongst other benefits. If all goes well I'll most likely join the FSB as well, but will look in to the ones you suggest too.
Cheers,
Rob
Incidentally my gf had arranged for the local Federation of Small Businesses rep. to come around yesterday (for her business) and they have an agreement with the Co-op bank for free banking for FSB members amongst other benefits. If all goes well I'll most likely join the FSB as well, but will look in to the ones you suggest too.
Cheers,
Rob
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