A stressful shamblesStarted my start up application in October. It was to buy a well established franchise business. I passed the initial credit check and thereafter completed the onerous business plan documents. The excel document includes a detailed business plan; personal survival budget; sales assumptions & a cash flow forecast. I spent 3 days completing this document with a level of detail that exceeded the examples provided within the guidance notes. For extra assurance, I also provided a 3 year projection, based on equivalent franchise territories. Other than a slight amendment, my business advisor appeared to be happy with the plan provided. I then confirmed my ID and provided bank statements and was told it would be passed to the underwriters to provide a decision probably within a week or two. Four months later, I’m still waiting…. In that time, i’ve chased for updates and provided numerous additional documents which were requested in drips and drabs. They also requested bank statements from our joint account even though the proposed loan and business would be in my sole name. I’ve answered a ridiculous amount of questions, all of which were unambiguously addressed in the business plan. For example: they asked how I calculated the unit cost yet the calculation was clearly laid out in the plan document. Another time I was asked to confirm the franchise cost, even though this was detailed throughout the business plan and in the draft franchise agreement. The underwriters either don’t read the submissions or they are wilfully delaying matters to buy for time. I was told from somebody with experience of the process that they play for time because of the way the government fund allocation works. They get a quarterly pot to allocate amongst the approved applications- once it’s gone, it’s gone until the next quarter. They don’t tell you this, so they drag out the application to play for more time. I’m sorry but this is an awful way to conduct any type of business. Beyond the financials, it is people’s livelihoods, hope and dreams that are being played with. There’s no excuse for failing to manage expectations from the outset!With all the obfuscation and delays, my credit check was due to expire over Christmas and so a further check was completed with updated bank statements. This was again passed but not being content with that, they then demanded an Equifax report as well! Although my credit score is very good, I’m beginning to feel that they’re looking for reasons to decline. The process is a shambles and suggests the BRITISH BUSINESS BANK is nothing but a government gimmick to give the appearance of supporting start ups and SMEs. While the rates are lower than most high street lenders, the payment term is also much shorter. Overall, I’m not convinced that this backward and stressful process is worth all the headache, so would really recommend others to steer clear!
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The Start Up Loans Company was established in September 2012, with a mission to help new and early-stage UK businesses access affordable finance and mentoring support.
