# 24 year old, no debts, no assets, no savings



## dibdab (5 May 2013)

Hi I am just looking for some advice to try and improve my standing financially so I can hopefully set up my own business.
I am recently graduated from university but luckily I have no debts. Unfortunately I have no savings or assets either.
I am about to start a new job where I will hopefully have the chance to save some money. I am hoping to raise a decent level of capital to start a business within the next 6 years. Unfortunately I will need to get a loan to do this. I have never had a loan in my life. The only credit history I have is for car insurance which I have always paid monthly.

I'll be earning about £12,000 a year before tax. This is likely to increase within year or so and may increase substantially after two years.
I want to get started a soon as I can.
Should I take out a loan for a car or something to get some credit history, or start saving?
I could probably afford to pay 200 a month towards either of these.
I have thought about investing, shares and mutual funds etc but I don't think this would be worthwhile in my situation
Thanks!


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## Palerider (5 May 2013)

A car is a liability, avoid it if you can.

Getting access to finance is all about repayment capacity, assuming you have a job then start saving, your bank statements will show a history of being well capable of managing money and living within budget, you do not need to have borrowed previously in order to get a loan, the main criteria are ...

Repayment capacity - can you afford the loan based on current or projected income.
Gearing - how much are you putting towards the overall costs, i.e, if a car costs €10k and you have €3 k then you need €7k loan or 70 % gearing which is acceptable, 100% is not.
Security - any security available, maybe a personal guarantee from another person, maybe no security is required at all.
Performance - how has your account been managed, any items bounced, good track record of savings etc.

You stick to this and you will be fine, good luck !


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## Bronte (6 May 2013)

I've nothing to add to Palerider's post but it's great to see a young person with such get up and go.  Best of luck with your business.


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