Archive → July, 2011
Raising money for business
We are a country of shop keepers said Napoleon, whilst not exactly true we English certainly like to run our own businesses. But with nearly half of all new businesses failing within 2 years it is important to have the right financial backing. There are many different types of businesses but for the purpose of this article I shall focus on online companies. A case in point would be the successful online retailer Hot Corsets which started from a back bedroom selling basques and developed into a large corporation selling lingerie world wide. The owner was initially selling one or two items a week through their website and on eBay but with a secured loan managed to invest into a proper marketing strategy and build the business into what it is today. If you are going to secure a loan on your family home for business purposes make sure that you have done your homework and don’t spend the money easily!
Many a time have I spoken to people who borrowed money for their business only to fritter it away on holidays, cars and gifts. So so easy to look at your bank balance when the money has been paid in and feel rich, but remember it has to be paid back. Make sure you have a good business plan and that you have factored in every possibility. What would happen if you were taken ill and unable to run the business? Would you have a contingency plan?
It’s a good idea to have some money in reserve for such occurrences. In some cases it might be worth employing the services of an accountant to look into these things for you.
Buying your first home
If your looking to buy your first house then it really can be a stressful time. Buying your first property in the UK is practically a minefield with the current loan to wages ratios and huge deposits required by the lenders.
If you are lucky enough to be in a position to be able to afford your first home then it is advisable to shop around and speak to a fully qualified mortgage advisor.
British financial advisers are regulated by the Financial Services Authority or FSA. This means that they have to give you the very best advice taking your needs into account.
Whilst Mortgage Brokers and financial advisers will receive a fee from the lender this does not mean that you are getting a worse deal. On the contrary they will sometimes have access to products that are not available on the High Street. Some advisers do charge a fee for their services though so it is worth your while to ask them up front if they do. According to FSA regulations though, they are obliged to present you with an Initial Disclosure Document on your first meeting. This document tells you whether they are truly independent or not and if they charge a fee. It will also state whether their fees are added to the loan or payable upfront.
Doing it Yourself
If your sure that you don’t want to use the service of a mortgage broker or advisor then there is the option of arranging your own mortgage. I would strongly recommend against this as lots of financial advisers offer a very honest, reliable service.
If you insist then you are better visiting some of the large High Street banks. Many of them have their own mortgage advisers, but obviously they are only recommending their own products. Places to try are – Halifax and Yorkshire Bank. Don’t sign anything until you have shopped around and compared all the lenders products.