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Finance Refused - Quelle Surprise

  • 13-08-2010 3:59pm
    #1
    narommy
    Registered Users, Registered Users 2 Posts: 469 ✭✭


    Looked for backing for project from my own bank.

    The Basics
    EBITDA PA, Projected €100k (Conservative)
    NET say €50K
    Investment Required €180k stock
    FitOut and WC €200k (Could get closer to €150k)
    Property unencumbered €225,000 recent valuation as security

    I was looking for Stocking Loan with stock as security and loan for fitout etc with property as security.

    Refused as not enough of own cash injected although was willing to put up asset worth €225k.

    I viewed it as low risk and a good proposition but bank not willing to progress. It is sickening me as is is only opportunity I will have to do this (or at least any time soon/this decade)

    I am wondering should I bother with the other banks............?????????


Comments

  • #2
    Bandara
    Registered Users, Registered Users 2 Posts: 3,282 ✭✭✭Bandara


    error


  • #3
    Bandara
    Registered Users, Registered Users 2 Posts: 3,282 ✭✭✭Bandara


    "I was looking for Stocking Loan with stock as security and loan for fitout etc with property as security"

    Can you expand on this it doesn't make sense to me, your looking for have a SL financed by the stock your intending to buy?

    Your 225k 'asset' as security is completely unattractive to any bank/investor. Even if you released 100k of equity from it and put this into the package it still leaves your funding requirement to 70/30 level which is miles away from where any bank is going to go near.

    I presume the asset is your family home ?

    Your original post has a few gaps and its hard to build the full picture, were you asking for 100% funding with just a property as security?


  • #4
    Budget Marketing
    Closed Accounts Posts: 66 ✭✭Budget Marketing


    Hi this does not surprise me in the slightest. Obviously you have not gone into details re: the plans for the loan but your security was only a nominal fraction of the amout you were seeking.

    Regardless of the collatoral you can offer a bank, (and in this case you offered much too little) banks will assess each loan applicant on what the individual can bring to the table in terms of experience and qualifications.

    Aso considering that naturally people pitching to banks are going to be over optimistic your net realistically would probably be in the region of 30-40k. Just saying it as the bank would see it.

    Rob


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