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Trevor
30-05-2002, 08:57 AM
Hi there,
My query regards funding for a pressure washing business that i would like to start up. My problem is getting backup from a house owner. The bank aren't interested unless i can get a guarantee, which is fair enough. I have about £10,000 pounds at present but without more backing i'll struggle to get up and running (washer costs about £60000). I wouldn't ask my parents as they are close to retiring age, so how does someone without a house as insurance ever get started? I have considered selling my soul to the devil.........

gino128
30-05-2002, 09:36 AM
Frank

I have a similar problem with my website, but am in the fortunate position of being a house owner.

That said, I have heard of a government scheme which your local business link www.businesslink.org (http://www.businesslink.org) should be able to help you with.

Basically, I think it depends on the strength of your business plan but the government is supposed to act as guarantor for people in a position such as yours (i.e. without capital).

If business link can't tell you about it specifically they will have the links to local government who would be able to help.

Good luck

gino

Phil Greenwood
30-05-2002, 01:06 PM
The scheme mentioned above is the Small Firms Loan Guarantee Scheme.

Business Link will be able to help as well as the DTI

Warlow
01-06-2002, 08:19 AM
Hi,

The SFLG scheme is cetainly the one you want. It's ideal for someone without assets to back up a loan request.
As well as Business Link and the DTI all the big Banks should have details. The problem is that some Banks seem to have a mental block where this scheme is concerned and rarely mention it.
You should therefore considering looking around for a Bank that knows about the scheme and offers it to you without prompting. If your Bank didn't do this then wave goodbye and go elsewhere!

Rob
www.smallbusinesssuccess.biz

Annabel
06-06-2002, 11:10 AM
Um, has anyone ever tried the SFLG scheme? Its not as easy to access that scheme as their website/the media make out. Basically, the scheme is run by one of a number of banks (they sign up to and act as a 'lender' for the scheme).

Earlier this year, a problem cropped up that meant we'd need to raise around £6K capital within a very short space of time (3 weeks). It concerned an order we'd received from Italy that was worth £13K - we were due to make approx £6K profit from this order).

Some members of our family agreed to cough up the capital required - but from our own assessment of the situation, we recognised we needed a temporary overdraft facility to help us through. Our bank promptly turned us down for any kind of overdraft facility stating it was due to lack demonstrable income (w'ed only started trading 2 months prior and had just come back from our first major exhibition - which is where the order was picked up). Anyways, we did some research and came across the SFLG scheme. It turns out our bank was one of the participating organisations on the scheme - so we approached them again and asked if we could be considered for the scheme. However, we got a prompt "no - you would not be considered for this scheme" response.

We found this 'we're not even going to consider you' response very frustrating, considering "The SBS Small Firms Loan Guarantee Scheme guarantees loans from the banks and other financial institutions for small firms that have viable business proposals but who have tried and failed to get a conventional loan because of a lack of security" (taken from www.sbs.gov.uk/SFLGS/default.asp).

1. Our business plan was sound and thoroughly researched (infact, we have been complimented on its thorougness by the Prince's Trust and Business Link)
2. The capital we needed was guaranteed
3. We could easily afford to pay back the money we would borrow from our family
3. The payment from the customer on the item being manufactured (that we needed the capital) was also guaranteed by insurance

...yet still, the bank didn't even want to consider an application from us.

I have since come across a couple of articles about the difficulties other small businesses have experienced in accessing this scheme. Perhaps its just that the Royal Bank of Scotland is a load of pants - admittedly, we didn't approach any other bank. I have other issues with the RBS concerning their apparent lack of understanding of the industry we work in (fashion) - we are planning on moving banks soon so any recommendations would be great. We've heard HSBC is OK.

Lucky for us, things are coming on OK now, but we missed out supplying an order worth £13K because the SFLG didn't want to know about us.

So much for a 'Guarantee' Scheme.

A.

Annabel
06-06-2002, 11:11 AM
Forgot to add - we also had assets to the value of around £8K at the time.
Cheers,
A.

gqbabe
07-11-2009, 10:59 PM
interesting read. felt like resurrecting a very old thread. has anyone had any luck with the SFLG scheme since then?

missfituk
07-11-2009, 11:41 PM
Hey I would use the search tool on the businesslink website that searches for grants/funding. I've had three grants int he last 12 months, a small £500 grant when I started to buy business stationary, an £8,000 Rural Development Fund in April and now I have been recommended for a £30,000 grant from Businesslink too although I cant remember its name - its a new one.

There are lots and lots of pots of money out there, you just have to get off your backside and find them, and the once youve found them, you have to research the application criteria, engineer your businessplan to satisfy its criteria, then make sure your 3 year projections are spot on - encouraging yet realistic, show a clear workable strategy of how the money will improve your business, explain clearly who will buy your products, why and how they will find them, all your routes to market, how you will grow, your plans over 3 years, know exactly what your plans will cost.... and you will be laughing all the way to the bank with a cheque.

Also remember about awards - again, learn to be good at writing applications, think like a judge - Ive been shortlisted to the last few people in every application Ive ever submitted for an award or a grant, its not as hard as people think, you just have to show competence and understanding of where youre going and how youre going to do it.

Adam2009
08-11-2009, 02:02 PM
Morning Everyone,
I'll throw in my pennies worth.
Some questions you should ask yourself before approaching anyone for funding.
Do I need it?
Am I asking the right person?
Am I asking for the right product?

I think sometimes people are too quick to jump on the hate the bank band wagon. I usually suggest that people don't treat the bank as a bank but as a person. For example if you came to me asking for £10k based on a lot of fluffy ideas with no real track record etc you're probably not going to get it and chances are you wouldn’t mind because you understand the risk on my part.
But people seem to have a different attitude to the bank, people view them as being there to help you and if they don't help you they're the enemy. Well unfortunately banks are not there to help you; banks are there to make money too.

The second problem is that so many people wonder in to the bank with fly by night ideas, you need to make sure there isn't just a gap between you and them but a great big gulf. And the way to do this is to go back to the top three questions:

Do you really need the money?
You're going to do better with a bank if you have been trading for a while and show you have built something yourself. If you think you can jump in at the deep end and just go in asking for the big money chances are it isn't going to happen.

Trevor - I have no idea about your area, but is it not possible to rent the equipment for a while? Show the bank you can run the business and can generate steady income. Show them that you'll be able to meet the repayments etc and then go for the big loan? Or even after doing that go for a smaller loan and get a second hand washer?

The second question is, are you asking the right person? The bank isn't always right, there was a handy loan around about 7 years ago called an enterprise loan available through enterprise agencies. This was designed for people who needed a few thousand at the start-up stage, the interest was very high but you got your money.

When I first started I was running around with 2 or 3 maxed out credit cards, essentially treating them as an over draft facility. I also had an overdraft put on my personal account. Total value was several thousand and it was nothing to do with the business bank. I'm not suggesting everyone start maxing out credit cards, but personal finance is readily available while business finance is not.


Last question was is it the right product?

Annabel - the over draft facility sounds as if it was definitely the right product, assuming you just needed to buy some stock etc to then sell on. I'm surprised your bank didn’t give you that. Perhaps instead of going to the bank with three weeks to go, can you submit a business plan ahead of time to them now showing how you may from time to time require an overdraft in the future?

If they agree then have it approved in principal. If they won’t then they're either seeing a flaw you’re missing or they may just not be interested. If the second reason then just take your plan to another bank. The co-op bank is linked to the FSB and are apparently good with overdrafts.

The SFLG would not be the right product for a £6k facility. The SFLG is a very tricky one, we have actually taken a company through the whole process of it for quite a large amount of funding and got it for them but looking back I'm not sure if it was worth it. It cost a lot of money in accountancy etc and the SFLG has extra fees associated with it.

The problem apparently with the SFLG is that although the government is shouting about it, the banks claim they do not get the back up the government promises. From a banks point of view it sounds brilliant, the government covers a large % of the risk, you would have thought banks would be jumping at it. The fact they’re not suggests there is a problem and I’ve heard that when it comes to the government covering their % of the risk in the cases of bankruptcies etc it doesn’t come very quickly - just what I’ve heard of course, don’t quote me.
I’ve only included about 25% of what I would normally say here, but I should have a blog up on this in the next couple of weeks.

You should also be out looking for every possible grant and applying for every award (even if you don’t win an award or get the grant at least you can tell the bank manager you were in the running)....but more than all of that you should be running a profitable business at whatever size and banking that profit, finance is expensive, the less finance you need the better!

tin03gin
09-11-2009, 04:58 PM
I've had a week or two of pow wows with the banks recently, and they are by their nature difficult to pacify. As Adam points out they are there to make money, there not sponsors as such, and can be frosty at best.

The biggest part is frustration, I had an "investment expert" at a high street bank telling me last week that online businesses aren't making any money; the crash is coming over the hill at high speed... Google have overreached and are going to bring half of web 2.0 companies down by 2011. The way he was going on the internet won’t exist in 2 years, which is quite an incredible stance.

We didn’t get on too well….

As he put it the bank likes "ones that we can get in a car and drive to"

Frustrating afternoons