Business Loans

markymark21

Evening!

Business loans: is a guarantor/Collateral a prerequisite for a bank loan for a start-up? Back story - looking to finance a modern Vietnamese Restaurant & Bar in Dublin. My business partner and I have extensive experience in hospitality abroad and in Ireland and I've completed a fairly comprehensive business plan. 

I firmly believe (obviously!) that this concept can be very successful and we will be seeking to $50K with us investing a similar number into this venture.

Don't want to walk into a meeting with the Bank Manager blind/unprepared so hence the question

Many thanks

Mark

Bank of Ireland: Aisling

Hi Mark,

Thanks for getting in touch with us here on Boards.

If it is a Limited company, then we would require a Personal Letter of Guarantee from all shareholders in the company (as security). If it is a sole trader or partnership, then it would not be necessary once the overall lending exposure is below 120k.


In terms of what supporting information Bank of Ireland would look for, please see the below list (additional info may be required depending on nature of proposal, but will be clarified with you at the time of enquiry):

1. Business plan with cash flow and profit and loss projections for minimum first 2 years of trading
2. [font=Calibri","sans-serif]Minimum of 6-12 months bank statements for the personal accounts of all shareholders (if non BOI banked)[/font]
3. [font=Calibri","sans-serif]Breakdown of set up costs of the new business[/font]
4. [font=Calibri","sans-serif]Proof of what personal cash input the customer is investing into the business themselves[/font]
5. [font=Calibri","sans-serif]Copy of CV for the owners of the business[/font]
   

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I hope this helps.

Thanks, Aisling.

silver2020

I don't want to rain on your parade, but you will need a lot more than 50k to set up a restaurant - so I would assume you have a decent amount of capital yourselves.

Also, what you think and what the market thinks can be quite different and of course you will get plenty of people telling you that its a great idea.

But will they become customers. Will you get a substantial regular trade. 

Maybe look for someone in he trade to give an independent overview of the plans - remember the restaurant trade has the highest failure rate of any business type and currently there are far too many restaurants about.    

markymark21

silver2020 wrote: »

I don't want to rain on your parade, but you will need a lot more than 50k to set up a restaurant - so I would assume you have a decent amount of capital yourselves.

Also, what you think and what the market thinks can be quite different and of course you will get plenty of people telling you that its a great idea.

But will they become customers. Will you get a substantial regular trade. 

Maybe look for someone in he trade to give an independent overview of the plans - remember the restaurant trade has the highest failure rate of any business type and currently there are far too many restaurants about.    

Hi Silver2020

As I mentioned above - we have 50K set aside and are hoping to raise 50K from a medium-term loan and well as looking at some other options including potential business partners fronting up some start-up capital, micro-financing etc Looking at Daft etc you can secure a small premise for $30-$40K (key money) so seeing as this isn't a Michelin starred restaurant I'm looking to open it would be very much possible to re-design and stock that sort of venue on a small budget.

I'm well aware of failure rate as I currently work as a senior auditor for a large stocktaking company where it's my role to advise my 15 clients (15 difference bars and restaurants around Melbourne) how they become more operationally efficient, increase revenue, reduce costs etc. In fact, three of the venues I audit are pretty similar to what I'd like to do in Ireland so I have a fair bit of info I need straight from the horse's mouth. 

Of course, Dublin isn't Melbourne and of course, there are going to the differences in market tastes, the red tape involved etc but the nuts and bolts of these venues are the same and I believe its something which could work well as A) Its a pretty original concept (In Ireland) and Its a casual restaurant which makes it accessible to everyone and means you don't just become a restaurant that's busy on weekend

A good example of why this is important is Amuse restaurant on Dawson street which closed recently. Despite great reviews, experienced owners, great location and good food they had to close. The fact is you really need to be busy (or at least steady) Monday - Sunday. If you price yourself as a special occasion restaurant, have expensive stock holdings and require a large FOH and BOH team to cook and serve this food it can be hard to make money

 

markymark21

Bank of Ireland: Aisling wrote: »

Hi Mark,

Thanks for getting in touch with us here on Boards.

If it is a Limited company, then we would require a Personal Letter of Guarantee from all shareholders in the company (as security). If it is a sole trader or partnership, then it would not be necessary once the overall lending exposure is below 120k.


In terms of what supporting information Bank of Ireland would look for, please see the below list (additional info may be required depending on nature of proposal, but will be clarified with you at the time of enquiry):

• Business plan with cash flow and profit and loss projections for minimum first 2 years of trading
• Minimum of 6-12 months bank statements for the personal accounts of all shareholders (if non BOI banked)
• Breakdown of set up costs of the new business
• Proof of what personal cash input the customer is investing into the business themselves
• Copy of CV for the owners of the business
  
  
  

[*]


I hope this helps.

Thanks, Aisling.

[*]
That's fantastic, thanks for getting back to me Aisling

silver2020

If you have 50k of your own and looking for 50k matching, you shouldn't have too much problem. Maybe get an accountant on board now and you'll find many will have contacts within banks to get an initial view on the likelihood of it being approved.

You also have peer lending such as linkedfinance.