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hewson hewson is offline
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Join Date: Jan 2012
Posts: 2
Finance Help

I want to start my own business, i have a sound business plan, which will show a healthy profit at the end of the first year. The trouble is in the past i have a bad credit rating, and can not get funding from the bank. Looking for 25k to start-up.
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AlexanderSmith AlexanderSmith is offline
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Join Date: Jan 2009
Location: Milton Keynes
Posts: 267
Firstly, Hi and welcome to the forums. Youve found the right place to sit and chat.
Im glad that you have developed a sound business plan, and that it says that you are on course for a healthy first year profit. However, just ask yourself how realistic is that figure, and also could you survive if you only achieved 10% of what you expect in the first year?

I know it sounds like a harsh cut, but it was how I was told to measure my business plan, and actually when it came to it my sales were 20% of my initial projection. To be honest Im happy with that as I had 3months where I couldn't do anything, but its worth considering.

Obviously for a bank to supply a business loan, they will want to see that you are putting in a substantial portion yourself, normally being matched 50:50. Nonetheless if your credit rating is bad, they may have some concerns.

Other sources of income / start up:
Friends and Family
Credit Card (Not the greatest idea, due to high interest).
VCs
Or private investors. Do you know anyone that may have an interest in your product / Business.
Finally there is always the Livewire award on this website, which could help you to get going.

Private investors can cause great surprise sometimes. For example, I had an email yesterday showing interest in my plans for growth, and have been offered a silent investment to help get established in their local area.

I hope that this helps a little.

Regards
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AlexanderSmith AlexanderSmith is offline
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Join Date: Jan 2009
Location: Milton Keynes
Posts: 267
Firstly, Hi and welcome to the forums. Youve found the right place to sit and chat.
Im glad that you have developed a sound business plan, and that it says that you are on course for a healthy first year profit. However, just ask yourself how realistic is that figure, and also could you survive if you only achieved 10% of what you expect in the first year?

I know it sounds like a harsh cut, but it was how I was told to measure my business plan, and actually when it came to it my sales were 20% of my initial projection. To be honest Im happy with that as I had 3months where I couldn't do anything, but its worth considering.

Obviously for a bank to supply a business loan, they will want to see that you are putting in a substantial portion yourself, normally being matched 50:50. Nonetheless if your credit rating is bad, they may have some concerns.

Other sources of income / start up:
Friends and Family
Credit Card (Not the greatest idea, due to high interest).
VCs
Or private investors. Do you know anyone that may have an interest in your product / Business.
Finally there is always the Livewire award on this website, which could help you to get going.

Private investors can cause great surprise sometimes. For example, I had an email yesterday showing interest in my plans for growth, and have been offered a silent investment to help get established in their local area.

I hope that this helps a little.

Regards
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Alexander Smith
Fizz Pop Science

Fizz Pop Science is working to become the UKs leading extra curricular science education provider. We want to engage children with the sciences and have them experimenting themselves, leading to new discoveries which we hope will inspire.

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andrewpallett's Avatar andrewpallett andrewpallett is offline
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Join Date: Jan 2012
Posts: 93
Alex is right - having a solid business plan that shows your business is robust and more importantly is financially viable is important.

In essence, banks want to know that you will be able to pay them back the money they are lending you - so my best piece of advice would be to go and speak with a business specialist at a bank, discuss the fees, how much you would like to borrow and most importantly what they would need to see from you in order to get the loan.

Credit rating is a stumbling block, so you might be required to put up more of the money. Could you start smaller, and then grow to a certain size and then approach the bank? They may be more likely to help if they can see an existing sales history.

Best,

Andrew
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hewson hewson is offline
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Join Date: Jan 2012
Posts: 2
Thanks

Thanks for your posts, and looking at my Business Plan again, i could start off on a smaller scale with just a 5k investment or loan.


Paul
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amac's Avatar amac amac is offline
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Join Date: Jan 2012
Posts: 120
Banks are not a good bet right now for obvious reasons.

Quote:
Other sources of income / start up:
Friends and Family
Credit Card (Not the greatest idea, due to high interest).
VCs
Or private investors. Do you know anyone that may have an interest in your product / Business.
Finally there is always the Livewire award on this website, which could help you to get going.
Sound advice. Family and friends is a good option for most starting out.
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andrewpallett's Avatar andrewpallett andrewpallett is offline
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Join Date: Jan 2012
Posts: 93
Great to hear Paul - be sure to let us know how you get on!

Best,

Andrew
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We are on Facebook and Twitter!

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dan_plan's Avatar dan_plan dan_plan is offline
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Join Date: Mar 2011
Location: London, N226AD
Posts: 425
Hi hewson. Have you tried with investors?
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allianceonellc allianceonellc is offline
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Join Date: May 2013
Posts: 5
Starting up a new business is not that easy as it seems, and the most crucial process, is to arrange the finance and to create a great plan to meet the future needs. I would like to add that if a company is not funded it is unable to accomplish its mission which is the purpose of its existence. Obtaining funding should start with a solid business plan.
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