Need to Raise 15k - Bank or Firends and Family?

Posted on: Thu, 07/12/2006 - 14:13
Need to Raise 15k - Bank or Firends and Family?

Hi everyone,

I have recently registered and posted my first pilots log. It can be found here:

http://www.flyingstartups.com/pilots_log/pebble/2006/dec/07/its_just_beginning

We are now at the the stage of raising the capital for our first order. We need around £15,000. I will be making an appointment with a bank to discuss our idea, product and base plan. Can anyone give me some advise on borrowing this amount from a bank. It isn't a lot but I am not sure what they are going to say. What would the interest be in this amount? Should I take a sample of our produst and show the business adviser? Can anyone recommend a particular bank - HSBC/Natwest etc?

Alternativly, should I speak to friends and family?

Regards,

P


Posted on: Fri, 08/12/2006 - 15:54 #1
Raising finance

Hello again :)

Steve has written a book all about funding which is called "How to fund your Business". It gives a great overview, and recommendations on each type of funding for each situation/business stage (but mostly focussed on startups & growth).
You can find it here on Amazon:
http://www.amazon.co.uk/How-Fund-Your-Business-Essential/dp/0273706241/ref=pd_bxgy_b_img_b/026-7223098-0621250

It is well worth your while to check through different avenues & options before you sign the bank papers.

One major consideration is this: Is this the only finance you will need, or will you need a second round of funding before paying back the frist lot?

If you go with the bank and then run out of cash they might be reluctant to lend again (more money is always available on sunny days...) Banks are also often happy to match investment, but not so happy to be sole funder. So, if say in a year you need more cash, but you have used up all your own money so you have nothing new to put in, then they will be much less interested. If you know or suspect you will need more later, you might want to consider mixing your funding sources early on.

There are fab grants for exporting. Don't know if there is anything for importing, but it is worth checking with your local business link. They tend to have a good overview of what grants are available to start ups/growing businesses and for specific projects.

Anna
Moderator, flyingstartups.com

Anna
Moderator, flyingstartups.com

Posted on: Sat, 09/12/2006 - 18:33 #2
Interest issue

Have a good trawl around on the web. You can ask for loads of quotes online, without giving your personal details. It will at least give you some idea what repayment periods and costs are currently available.

Good luck with you business.

Posted on: Sat, 10/02/2007 - 12:46 #3
Getting quotes for finance

Be very careful its not a good idea to get lots of quotes for finance which involves giving your details. This is because you will often find they do a credit check on you.
This can have a seriously negative effect when you do decide on a funding option which involves a Bank or finance option as it will seriously adversly effect your credit score

Posted on: Sun, 11/02/2007 - 16:30 #4
Use banks as a last resort

I would only approach banks if you've exhausted all other avenues of funding. As mentioned above, there are quite a number of grant givers out there. Also, try any wealthy friends/aquaintances - have you through too about the possibility of raising finance through re-mortgaging?