Borrowing as a self-employed person

S

soc100

Guest
I have a bit of a dilema right now .
I need to borrow approx 10k to do a few things primarily renovations for my house.

I am only in my business 7 months and cannot really put my hand on heart to say i have yet earned any money or much anyway- no accounts either yet to show. Im in property and the turnaround on payment is long and i have spent almost all of my saving setting up this business.

I went to my own bank who turned me down, which i was very surprised at ! having always held an excellent account with a lot of money in at all times, owner of 2 houses and a car worth 10k with no loan on it - i though it would be no problem.
I think my problem is that none of these loans are with them !!
Aside from the option of re-mortgaging - are there any other options available to me ???
 
I think my problem is that none of these loans are with them !! Aside from the option of re-mortgaging - are there any other options available to me ???

Why are you restricting yourself to the institution with whom you already deal? Shop around. Threaten to or actually move your business if necessary. Financial institutions make millions every year from customer inertia. Assuming that you can afford (to service) the extra debt it might actually make sense to borrow at mortgage rates (c. 3%) rather than at unsecured personal loan rates (c. 10%). Particularly if you can get the top-up scheduled over a shorter term and not spread over the full mortgage term. An added small bonus is that owner occupier mortgage interest tax relief extends to loans taken out to improve/renovate your home if you are not already claiming the max.
 
I am only in my business 7 months and cannot really put my hand on heart to say i have yet earned any money or much anyway- no accounts either yet to show. Im in property and the turnaround on payment is long and i have spent almost all of my saving setting up this business.

In my experience, if you show a 3 -5 yr business plan, showing project income and income to date, it should demonstrate to a bank the viability of your business, and show that you have thought it through. If you can get a qualified accountant to prepare it or sign it, even better.
 
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