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Tips for securing finance

29 April 2005
Tips for securing finance

Make a detailed list of your assets and resources. This should include cash, equity in a property, investments, life policies and any articles/possessions which could be sold to realise cash.

Narrow down type of business (traditional pub, food-led operation, town-/city-centre or rural, letting accommodation, leasehold or freehold, preferred location, fully developed business or one with potential, etc).

Speak with a specialist licensed trade financial adviser who can advise you on the price range in which you should be looking, and the amount you can borrow.

Contact specialist agents. Give the agent as much information as possible about your requirements, and keep in constant contact so they know you're serious.

Begin work on a draft business plan. This will help concentrate your mind on the important financial issues to be covered during the loan application process.

Prepare a CV with details of your experience in and out of the licensed trade, and your ambitions in the trade. State how your skills can make the business a financial success.

Tell the truth, as negative facts, such as a small blip in credit history, can sometimes be overlooked if there are sufficient positive features.
Prepare a simple SWOT (strengths, weaknesses, opportunities, threats) analysis once you've found a business which strongly interests you. Don't rush into the first good business you see or read about, but approach each prospect with a critical eye and ask yourself, "would it really be the right one for me?"

Prepare a detailed cash-flow forecast, taking into account seasonal trading variations, capital expenditure, unexpected contingencies, realistic gross profit margins, employment costs and most importantly, your personal spending requirements on a monthly basis.
Use licensed trade specialist professionals wherever possible, as their input will be much more acceptable to your proposed lender.

Protect your credit status. Credit agencies now have a sophisticated system of recording your credit transactions, so it's essential that all mortgage and loan repayments are made on time and in full, and monthly credit and store card payments are made on time for at least the minimum amount. It will also be necessary to produce at least six months of "clean" bank statements. Lenders scrutinise this information closely.

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