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Hi, both my Husband and I are currently employed and earn an a steady combined income. I'm considering leaving work and commencing a start up business and wish to obtain a business loan to add to some savings. What implications do I need to consider?
Responses
Hi Tahsha,
Great question. One of the biggest implications leaving your job will affect your combined borrowing capacity and serviceability for the loan.
Things lenders will assess.
* type of business?
* track record?
* applicants/directors business experience?
* asset backed?
* and more.
When it comes to business lending it will be case by case and different with different lenders.
Best you speak to a finance specialist to understand your financial position. happy to chat.
All the best,
Daniel
There are many things to consider. Firstly how much do you need to find your business for the first 12 months? Do you have any other loans?
How much spare income with your husband have without you earning an income for a short period of time?
Do you have a business plan?
Is the industry that you're going to start in the same industry that you're working in now?
What research have you done to check on the demand for your business in the marketplace?
What is your Plan B if your business does not succeed – can you get work back in the same industry that you are in now?
Hi Tahsha,
Great strategy to ask this question before you plunge into self employment. Business Finance can be expensive & challenging to qualify for when in start up. An option you could consider is a line of credit on your existing mortgage.
As stated by other - get your finance in order before changing to self employed and be realistic about startup costs and time to turn a profit. I would recommend you "share" you plan with a business advisor - some I work with have access to the $20k NAB micro loan - which requires no security.
