Hello I have been planning on setting up my own business for a while now and figured I needed some advice and information about business banking. I have been running live music events for 2 years now and have acquired a big following of around 1000 people, it has always been my dream to open my own live music venue & art gallery but I’m unsure if I’ll be able to get a business loan to fund it. I am currently in part time work earning around £500+ a month, I also have around £5000 in sound system assets to put into the venue. I have a business plan and I’m currently doing market research to see if the public would like a new venue in my area, especially for art as there is a huge art college / crowd here with hardly any artistic venues or galleries. My worries are that I’m not earning enough to get a business loan for a limited company as I have no securities to put down incase things go wrong even though I have assets and the majority of the loan money would be spent on acquiring more which could be sold off if things went pear shaped. I am looking to get £20,000 over 10 years and I am also applying for funding off the local council and from the UK arts council. Will this be likely? or will I have to get a personal loan? Any advice or insight on this matter would be hugely appreciated.
If you get a loan from the bank for your limited company they will more than likely ask for personal guarantees to secure it. Having said that £20,000 is not a massive amount, especially if you have assets to secure it. Best to have a chat with a couple of different banks and see what they are willing to offer.
A lot of people at the moment are doing ‘portfolio’ funding, putting together a council grant with a bank loan, money from investors etc. to get what they need rather than getting it all from one place. There are quite a lot of small loans and grants available if you hunt around. I put together a list of funding sources recently which you might find helpful – http://blog.thecompanywarehouse.co.uk/2012/06/18/how-to-find-start-up-business-grants-loans-and-investments/
It sounds like an it would be a good business. Good luck with it!
You’ve put together a very useful list Peter. I Earlier this year I was in a similar situation and I talked to an advisor from Natwest. He was a very helpful guy but pretty much discussed what you had in that blog post.
As to thevoid’s idea: 20k is not a huge amount of money if that is all you need to make a start then it would not be so hard to get it even if you need assets to secure it. Good Luck with it.
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I’m not so sure of that as I have a sneaking suspicion that £20,000 in these circumstances will be rather difficult.
Banks and finance companies tend to value assets on a fire sale basis and a second hand sound system won;’t be valued very highly
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