BP/FUNDING/Economy QUESTION

garytuohy

I have recently applied and failed to secure a loan from ulster Bank. The BP was solid(in my opinion) and we had secured 80K investment. Applied for a loan of 180K and 50K lease hire of equipment.

Is there any other options for funding without risking our own shares in the company?

thinking of a downscale with 70K unsecured loan, 50k Equipment lease hire and 80K investment

Forecasts were turning over 120K profit and worse case scenario was 45K

in the current economy, is there any real point in trying?

Bandara

garytuohy wrote: »

I have recently applied and failed to secure a loan from ulster Bank. The BP was solid(in my opinion) and we had secured 80K investment. Applied for a loan of 180K and 50K lease hire of equipment.

Is there any other options for funding without risking our own shares in the company?

thinking of a downscale with 70K unsecured loan, 50k Equipment lease hire and 80K investment

Forecasts were turning over 120K profit and worse case scenario was 45K

in the current economy, is there any real point in trying?

Its very very difficult to get anything at the minute gary, good friend of mine applied for 1.3m, had 900k of free cash ready to put up alongside it (along with a huge amount of property equity) and the venture was about as cast iron as it gets, and his experience and track record of success is second to none.

All the banks apologised quite profusely and admitted it was ridiculous that they couldn't do it, but that the underwriters are simply passing nothing.

Tough times to start up. Good luck with it

How easy was it to secure funding before this "recession"?

I'm only 24 myself so never gone through this process before. It doesn't phase me, i'm just wondering how tough it is to secure funding from a bank or financial institution?

garytuohy

Yeah I thought as much, well I will push on with it and try why I can.
I am 23 so I kinda find the banks dont take us too seriously.
Our BP was signed off by one of the biggest accountancy companies in Ireland, even they were impressed with the concept and the BP

garytuohy

garytuohy wrote: »

Yeah I thought as much, well I will push on with it and try why I can.
I am 23 so I kinda find the banks dont take us too seriously.
Our BP was signed off by one of the biggest accountancy companies in Ireland, even they were impressed with the concept and the BP

Do you think ageism played a part here? I'm worried about this aspect of it. You did a good job at securing finance yourself, it's a pity they won't pay much attention to you, did they give you a time limit to come back? Where does this leave you now?

What's the idea? If of course it's not private, if it is, just ignore me.

Sponge Bob

Hammertime wrote: »

Its very very difficult to get anything at the minute gary, good friend of mine applied for 1.3m, had 900k of free cash ready to put up alongside it (along with a huge amount of property equity) and the venture was about as cast iron as it gets, and his experience and track record of success is second to none.

Story the same everywhere, I know a character who had a good idea ( from what I know of it ) and toddled off to the bank to raise something like 500k -1m, as you do .

Against that he had 300k in liquid investments ( not cash but certificates of deposit which are 99% cash ) and a recently valued pessimistically by the banks own valuer as 2m worth of residential zoned land in a posh part of a big city not in sunny Longford . That would have been 4-5m a few years back, easy. He also owns his own house outright .

The bank said they would lend him 1/3 of the face value of the certificates , €100k . Nothing for the property at all , they did not consider property as collateral because they are drowning in property collateral, so no. This is a new one on me , that property is not collateral at all.

He can do nothing with €100k so that idea is parked for the foreseeables

It is also really difficult to raise angel finance (typically early-mid stage development finance usually in loan note/equity mix sometimes with board seat) because lots of these characters are tied into commercial property funds that have forcibly stopped withdrawals. So they have no cash to hand and can get none out .

Someone a bit older could set up a pension fund with a bank, go to government bonds only and use that as collateral maybe. Not in their mid 20s though .

Can it just wait 6 months ??

Sponge Bob

Sponge Bob wrote: »

Can it just wait 6 months ??

Probably only if you can trademark the business name and register as a Ltd company. Or else it will probably be set up under his nose.

garytuohy

Don't want to get into the details of the idea but it has a very specific and very large(and growing) market. I think ageism was a small factor in the decision but we will push on with it.