50k business loan, bank, credit union...

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paperclip

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hi, here's my situation. i'm a couple of months into a 2 year career break.

i have 20k, split over 2 years, so, 10k each year.

i'm looking into the hostel business... i've backpacked quite a bit in the past, have stayed in many, and even worked in a few... i've an idea on what works and what doesn't.

i'm playing with the idea of buying a current hostel business... or maybe even starting from scratch...

i've a friend who's also interested in this, and i'd say 50k each would be enough to get this off the ground.

i've a long history with my credit union... i've borrowed 10k and 20k off them in the past, paid both loans off over a period of 1 year.

i've a joint mortgage with a friend with boi for the past 5 years.

my credit rating's grand.

my job is there in 2 years, 60k a year....

so, one plan would be to borrow the money, run the business... and maybe go back to my job in 2 years and hire a manager to run it.

do you the bank or credit union would be ok with this... if we buy a current hostel, that's got revenue?
 
no, it's v early days.

but if i find a hostel business for sale, and they can show a healthy revenue stream... this would work in my favour?
 
Then nobody can answer your question at this stage! Healthy revenue stream works both ways in that it will cost you more to buy the hostel possibly more than you are willing/able to borrow etc.
 
My advice would be to put together a Business Plan first and this will give you a real indication as to where you stand in relation to starting a business. It is also critical to getting money from the financial institutions. Despite the fact that the media report that there is no money being lent a good friend of mine just received 200K for his business but he does have a very professional business plan.

I'm also in the process of borrowing 100K for a business and it's looking very likely although again, a business plan is requited and I've just completed mine.

Even taking away the financing of your business for a minute the plan will force you to ask yourself (and your prospective partner) a lot of questions which will challenge whether you really want to go ahead.

Also, I wouldn't mention that you are planning to go back to your previous job in 2 years, you need to show passion for your new enterprise and convery that to your lenders.

Good Luck.

paperclip said:
no, it's v early days.

but if i find a hostel business for sale, and they can show a healthy revenue stream... this would work in my favour?
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