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Getting a business loan

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  • 27-02-2008 11:34pm
    #1
    mick.fr
    Closed Accounts Posts: 1,974 ✭✭✭


    Hi,

    I have a project and would like to have the opportunity to develop it with additional funds.
    I might need 15k and since I was with AIB I was wondering if maybe I could apply for a biz loan.
    My company is 8 months old, did about 100k since the beginning, and I would like to know according to your experience guys, if it is difficult to get a loan or?

    And what do they ask usually, tax clearance cert, biz plan?

    I do IT consultancy.

    Thanks in advance for your feedback


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    #2
    keefg
    Registered Users Posts: 3,187 ✭✭✭keefg


    You should be OK as 15k is a relatively small loan amount.

    You will almost certainly need a business plan & a tax clearance cert is very easy to get on-line (I got mine within a week).

    If I were AIB though I would be more concerened with why you need 15k? What happened to the 100k you took over the last 8 months?
    Do you have massive overheads?
    Why didn't you save some of the money to reinvest in your company?
    Did you spend it on sweets?

    100k is a very high turnover for a small/medium business so to ask for such a small loan of 15k might make AIB question your management skills.

    From my experience of consultants their overheads are not very high (a laptop, a cell phone, a suit & a car) so you are going to have to explain what you did with 100k in such a short space of time.


  • Options
    #3
    mick.fr
    Closed Accounts Posts: 1,974 ✭✭✭mick.fr


    No I simply had suppliers, 3 consultants for several weeks.
    Thanks for the feedback


  • Options
    #4
    --amadeus--
    Closed Accounts Posts: 5,096 ✭✭✭--amadeus--


    In that case you need to be looking not at your turnover but your profit. Talking about "doing" 100K is slightly misleading if thats not your profit - remember "Turnover for vanity, profit for sanity".

    15k based on 100k = 15%, banks would feel safe with that. If you are on a 25% margin (which is generous) then all of a sudden 15k based on 25K = 60%. Banks not feeling so safe.

    None of which will stop you getting a loan, with a good business plan and proof of cash generation you have a good chance. You will though be expected to put your own money in (ratios will vary depending on how solid they think your plan is) and you'll also need to personally guarantee the funds.


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