Raising capital (£10K) - any ideas

[230TE]

I have spent the last couple of years building up a small business restoring classic cars (not saying what make, I'm trying to keep this anonymous for obvious reasons, but despite my PH user name it isn't Mercedes). I started with about £30K capital, burned through it all in the first year, struggled through the second year, managed to raise a bit more capital and lost another £10K or so, but now I find myself in a difficult situation. The business is just starting to come good. I have a £45K order book, I have just taken on a very good mechanic who was running a similar business but couldn't make it pay as he can only work 25 hours per week due to family commitments, I have a good reputation and new enquiries coming in all the time, but I don't have enough working capital to allow the business to function.

I find myself doing jobs the long, difficult and inefficient way just to avoid having to buy in parts and services that I can't afford. This is slowing me down and making it even more difficult to turn jobs round fast enough to generate the cash needed to pay the bills. So now I find myself in the situation where either I find another £10K to put the business on a sound financial footing, or I get into a steady downward spiral which ends with my calling in the receivers before Christmas. I'm already stretching the patience of my suppliers on credit terms, and in the current climate I can't see the banks falling over themselves to offer me a loan. Just to add to the problems, I don't own a house or any other significant assets to offer as security.

So does anyone have any very recent experience of banks to suggest it would even be worth asking for a loan, and can anyone suggest alternative sources of finance? I suspect the business is far too small to be of interest to most business angels, VCs etc - it has some growth potential but I am in a pretty small niche market. All suggestions gratefully received.

[srebbe64]

Honest reply - family and friends.

[Boris.]

not even read it, but 10K - credit card will be the cheapest way in terms of interest, learn how to do it properly though.

[spikeyhead]

If you're after 10k for tooling, which your post suggests, then ...

Have a look through your order book, see what's in there that you can make some good quick profit on. Do that first and make sure you get paid for it quickly.

Use the profit from that to buy the first bits of tooling and then run through the order book again, see what that tooling will help to get done quickly and profitably.

Repeat as necessary.

It may be that you have to stooze a couple of credit cards to kick start this off, or use some family and friends help.

[jamesuk28]

Invoice factoring, maybe to help with any cash flow issues.

Spare credit on card, but no doubt you thought of this

Do you have anything worth pawning?

OD with the bank (again probably covered this)

Any part of your premisis or yard you can sub let

Scrap metal laying around or redundant machinery

Any grants you are not claiming?

Fiddle the VAT return (joke)

Sorry clutching at straws here but worth a shot.

[stuthemong]

does the mechanic have any money?

Could you lease the stuff you need? (this is most businesses get the pricy stuff they need)

Could you pay a local garage to borrow / have access to the stuff you need?

Edited by stuthemong on Monday 13th October 10:24

[spikeyhead]

have a look at second hand, trawl through the London Gazette for similar businesses that have gone bust and ask the receiver how he's getting rid of the equipment.

[evolutionvalet]

you have a PM..;)

[230TE]

Thanks for the advice chaps, all good stuff. I was hoping there was something obvious that I'd missed, but never mind. I've kicked things off by listing about £2k worth of parts on ebay, including some of my stash of ultra-rare bits. It occurred to me that if I go bust, having shelves full of parts that I would struggle to find elsewhere isn't going to be much of a consolation. Also negotiating with Mrs 230TE over her completely unused Visa card (£10K limit on that alone) and hunting around to find other stuff to sell.

I hate to say it, but I think my Mk1 Golf is going to be next in the firing line. It's in dry storage 40 miles away and I haven't even seen it, let alone driven it, in the last three years. Not exactly the best time of year to sell a track day car though.

[okgo]

230TE said:

Thanks for the advice chaps, all good stuff. I was hoping there was something obvious that I'd missed, but never mind. I've kicked things off by listing about £2k worth of parts on ebay, including some of my stash of ultra-rare bits. It occurred to me that if I go bust, having shelves full of parts that I would struggle to find elsewhere isn't going to be much of a consolation. Also negotiating with Mrs 230TE over her completely unused Visa card (£10K limit on that alone) and hunting around to find other stuff to sell.

I hate to say it, but I think my Mk1 Golf is going to be next in the firing line. It's in dry storage 40 miles away and I haven't even seen it, let alone driven it, in the last three years. Not exactly the best time of year to sell a track day car though.

Why will you not use the card?

Although, if this stuff is not being used I guess its best to get rid of that first..

[PhilLL]

Get a new credit card with 0% on purchases? Might at least give you the breathing space you need.

[edb49]

Are you sure you just need £10k? It sounds like you may have higher requirements than that.