We had a very interesting and wide ranging session at enterprise club this week with Liam Hickey of GLE. An hour and a half was no way long enough to fully understand credit rating issues, pros and cons of loans, how CDFI loans/support works etc but it was very useful.
Can’t really capture it all here but….
Community Development Finance Institutions such as GLE are loan companies that are Government funded to give extra support and to give loans when Banks won’t. There is info here on GLE website and the national Start Up Loans Company website. The rate is 6%, loans are from 500 up to 25K and there is no early repayment penalty.
There’s lot to learn about credit scores which seems different to credit ratings and credit reports. Credit scores are affected negatively if there is any check on you such as a new mobile phone contract. If anyone has good links and info on credit scores, rates & reports, please do pass it on. In the meantime I will be looking out for clearer info.
The thing is CDFI loan companies do not look at credit score or who has been checking your ratings but they will want to see your bank statements to see what’s going in and out. It’s more person-centered and they are not in competition with banks, but plugging the gap. If you have had late payments that won’t necessarily be taken into account (unlike credit scores) depending on how late, how much. These loans come with support to produce your simple business plan, cash flow forecast and a personal survival budget. 🙂
Tips from Liam
- Get a credit history
- Don’t get a loan if its a cash-flow issue, get an overdraft
- Join every networking opportunity you possibly can
- Don’t get fixated on growth – if you’re happy working 35 hours a week, don’t get a fleet of vans
- Get all your licences and insurance.
- Use local printers for your business cards and flyers. Vista Print are not as cheap as they look and once all extras been added, more expensive.
- Start-ups that CDFI love to give loans to – painter/decorators and childminders!
Thanks Liam. Feel free to contact GLE for more information.