[BrianDor]

Hi Folks,
I'm a newbie, and thinking of starting up in the carpet/upholstery/driveway cleaning business and was wondering, how are the banks doing for borrowing at the moment?  With the way things have been , have they tightened up? lending as much as before or are they rejecting more and more applicants? Money has to circulate, and move, its the only way to keep the economy going.
Also is there any other ways to finance new equipment? Leasing ( or do you have to be in business for a while to be offered that facility), finance companies? specialist companies???


ARGGGHHHHHHH its a minefield!!!!!!!!

[AshWhite]

It's possible to lease equipment, but as a start up you will be expected to guarantee the loan yourself - so your credit history must be good.

The leasing payments generally work out the same as Hire Purcase payments, but they are tax deductible.  Do a google search for "Lease hire funding" and you'll find several companies who specialise in this.  You can source your own equipment and get them to pay for it.  Also, you might find some suppliers have deals with leasing companies so they can arrange it all for you - I think Kennetts is one of the biggest.

As for a bank, you'd better have a bullet proof business plan in place before you even step foot through the door, or apply for a personal loan without telling them its for a new business.

All the best anyway.

Regards,
Ash

[Scoop]

Try these - www.armadaassetfinance.com/

They are NOT the cheapest but they do help a lot of small business startups. Definitely worth asking them for a quote.

[vallery]

Does the loan depends on the income I can declare? Thanks in advance.

[BrianDor]

thank you ash. it gives me some food for thought.its not easy is it? i want to work and work hard and contribute but its not that straight forward. i'll let you know how i get on.

[Mark Slaney]

  You'll find most carpet cleaning equipment suppliers will offer leasing deal's, world of clean, restormate to name a couple. Still subject to credit check's but the apr will probably be higher than say a high street bank as they use separate leasing companies. If your credit reference is good the best deals are still companies like sainsburys and tescos, hard to get though.

[AshWhite]

Vallery - loans and lease agreements definately factor in affordability, so yes your income would come in to play. If your a new start up, a good business plan will come in useful.

Before starting an agreement, you should consider the differences between loans and leasing:
With leasing your not BUYING the goods, so the monthly payment goes against your profit in the same way as when you buy chemicals, training courses etc (ie it is a liability) at the end of the term the goods go back, OR you pay a nominal amount (maybe as little as £100 - called a 'peppercorn' payment) and keep the goods indefinately. Because you are not incurring interest there is no APR, but the expensive part is the admin/management charges levied by the leasing company.

When you take a product on Hire Purchase you are buying, so you can claim tax relief on the interest part of the agreement (and possibly depreciation). At the end of the term, your payments end and you own the goods.

Lease payments will generally work out more expensive on a monthly basis, but they are more tax efficient.

Good luck all

Ash

[AshWhite]

Oh, and lease companies will usually ask for 3 months payments upfront, and will quote figures EXCLUDING VAT, whereas HP will always INCLUDE VAT.

[Dave_Lee]

Other differences between Hire Purchase and Leasing are:-

1. Tax wise with leasing as said you claim back the leasing charges for the equipment, that is all.
    Tax wise for HP you claim back the interest charges AND the Capital Allowance on the equipment.

2. With leasing if you default and they repossess the equipment, you are still liable for all the remaining outstanding monthly payment
    due up to the end of the contract.
    With HP if you default and they will repossess the equipment. Often there are no other charges to bear.

Dave.

[vallery]

It is really hard to decide because as I understood the leasing is better because I own the equipment, but the payment is higher. It seems that the best way is to borrow money from a friend but it is also hard to decide whether this option is better. I wish I were born rich.

[Justine Hughes]

Hi there! Most carpet cleaning equipment suppliers will offer leasing deals.  In a bank, a lot of transactions are needed and some requirements before you can borrow money from them.

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