During the time since social restriction, we’ve had many enquiries from people reassessing their lifestyles and planning to move to the countryside to start a business.
Many people are not sure where to look for finance to help turn dreams into reality. And others look but hit brick walls with banks, lenders and/or brokers.
Firstly, there are 2 things to consider;
1. Deposit/Loan to Value
With any property purchase, you will need a sufficient deposit. With any commercial funding, you need a minimum of 30% deposit to purchase a property to satisfy lenders’ Loan to Value (LTV) criteria. Some people will sell a property to raise the deposit, while others have cash already available. Others often receive a parental gift, or parents and children consolidate to live together and run the new business.
2. Serviceability
Next, you need to consider the ability of your new business to service (repay) your proposed loan. It is good to start with a cashflow forecast to show your vision over three years. This is a good timeframe as your business should be relatively well established by then. Your forecast should show logical assumptions.
We have business plan & cash flow templates for different types of businesses.
Once we understand your vision and expected financial performance of your business, we can help you understand how much borrowing the business can afford and help you adapt your plans if necessary.