setting up new business-sole trader, financing it?

C

CARRIE.B

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Hi,
I am planning on setting up a business and working as a sole trader. I am working on my business plans and figures currently.

My start up costs will be approx €55,000 (includes fit out, office equipment and euipment & machines for work & stock).
I' ve been looking at some possible premises for rent, looking at one premises where rent is €10,000/ yr but after I fitting it out, 2 years will be rent free in lieu of this if we have a 5 year contract.

I have €20,000 in savings but would like to just invest €10,000 into the business and keep €10,000 for a rainy day. Has anyone any advice about approaching the banks for this kind of money ~ €45,000? Would be looking for a good overdraft facility as well. Is it generally 5 year loans that they give rather than any longer?

Any advice or suggestions greatly appreciated
 
from experience the bank will generally put in what you are willing to put in. so if you have 20k thats what i'd expect the bank to put in, of course that was during the good old days
 
Just been through this with BOI. I was told that they are generally looking for the promoter to provide 20% of the funding. Other advice

- Bring your accountant with you when meeting them.
- Make sure your figures add up - particularly cash flow.
- Emphasise how you will manage credit control.
- Treat meeting them as if it was a presentation to a customer.
- You really have to sell yourself - they most likely will not understand the nitty gritty of your business - hence the focus on you.

Even at that they only offered me 80% of what I was looking for - but it's better than nothing. Didn't even bother looking for an OD facility! My loan is over 5 years.

S.B.
 
Thanks contemporary and satan's bed for replies.

20% of what I need is 11,000 so I could provide that, if they could provide 80% that would be great.
I will not approach bank until I have everything in order, bringing accountant sounds like a good idea. I was going to meet with the bank in the coming week just to suss things out but will wait now until I have everything sorted. Are banks not keen to give overdraft facilities to small businesses at the moment?
 
I would be very surprised if they put in 80% of the costs of setting up a business without security.

I would guess that you will have to raise the entire €55,000 yourself through family and friends.

Have you security? A house. Have you a guarantor?

Brendan
 
My parents have said they will act as guarantor.
My husband and I have a house & mortgage with it.

Would prefer not to have to turn to family and friends for the money, we could probably put all our savings into it to come up with half the amount needed, was really hoping not to have to use all our savings though.
 
hi,
I started a business Feb 2009. It is a thin line between genius and insanity.
Start up costs were 80,000
got a loan from the *** for 40,000
Impossible to get an overdraft.
I have been banking with this bank for 4 years previously and have an i excellent credit record which swung it i think
BOI laughed at me
AIB wanted a lock of 5 years on my savings of 20,000. Like you i wanted to keep this for a rainy day/emergency overdraft.
I would advice to keep to your own bank if you have a good record and keep your business plan real.
 
Thanks for the replies & advice, getting the finance is going to be tough by the sounds of things.
I have been banking with BOI for about 20 years, paid off my student and car loans early, would have a very good credit record with them. (My parents, if I need a guarantor would bank with them also.
Our mortgage is with Ulster Bank. I have just a very small amount of money sitting in The Credit Union for 5 years. Was planning on approaching BOI for the loan.
Nediaaa was your loan for 5 years?
 
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