BFB 31: Business Loan Appeals, Mini Bonds, Crowdfunding & Banks, Selling Equity

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Complete Video Transcript

0:00hi this is Rob order from business and services among to my Friday business
0:03finance politics
0:04weekly roundup of news tips ideas and strategies on raising finance and
0:08dealing with banks
0:09so want to go for you this week well we’re looking at the bank appeal process
0:14a mobile where banks would be nice to relook an application hoping to end and
0:18no
0:18into a yes we can have a look at many bongs homework can have looking example
0:22have a high street bank now linking up
0:25with a crowdfunding site because him on location again that today Nov 27 chance
0:29to including somebody
0:30I’m legislature one might tip for the week about raising finance by equity
0:35show let’s start off with a bank appeal process
0:38mention the previous videos all the high street banks now have a former
0:42loan appeal process in place way if you have an email from the bank and
0:46genuinely feel aggrieved
0:48you can go back to the bank and ask for somebody independent within the bank to
0:52review it
0:52to make sure that the bank really has come to the right decision
0:55now there’s a guy called a professional Russell greeks every year he comes out
0:59and
1:00just Ghoshal the bank to review the files where they
1:03banks have said no just to see how the process works
1:07or this year’s reports just come out 3500 19 businesses
1:12approach the banks and ask them to relook at their request
1:15and note they our success is coming when knows the tuning into yes
1:20and in fact during that period an additional 30 million pounds with a
1:25borrowing
1:25was generated by training that no into yes
1:29on average since profess a group been looking at so this whole process
1:34on average of 39 percent to businesses are getting
1:37I yes from 10 to certainly worthwhile
1:40you looking at the appeal process of your back
1:44now when the other things that profess a great
1:47always looks at is well why would bank saying no in the first place
1:51and interestingly the top reason why banks say no
1:5443 percent to the move the crying because of a poor credit score
1:59now we had a look at this in my previous video an episode 30 about how important
2:03it is
2:04to maintain a clean credit far on the findings of this report
2:08really justify that you’ve got to make sure your credit report is
2:12very clean no default but if there are default
2:15go back and explain and this is one of the reasons why
2:18business owners are managed to not know into a yes
2:22because it’s a case of previously pops computer saying no
2:25and a human being looking at a file i’m looking beyond
2:29just watch included on the credit file having an opportunity to hear the story
2:33behind it
2:34for said if you have no and you want to go down the appeal process
2:37just going to your bank’s website type in the search box should be no doubt
2:41have that
2:42about an appeal process and Italy this there exactly what you need to do
2:46so on crowdfunding
2:49on an interesting development from crowd cube dock on
2:53a crowd cuban tradition ER I
2:56in the equity feel so if you’re looking to sell equity new business
3:00then go on to the investor base and people will put money into by very very
3:04small share the business
3:06a crappy was realizes an opportunity to launch something called a mini bond
3:10know what is upon unlike traditional lending
3:13whereby you take a borrowing any we pay every month or every quarter
3:17many bond is very simple you have a sec pues you pour the money for say three
3:22four five years
3:23I’m just pay interest on that debt and then at the end of the period
3:27of the pond here four years five you need it paid off in one lump sum and
3:31paid investors
3:32fact or you refinance the house where for a crowd cuba just launched they were
3:36many bond program
3:37on Watson however should not wait they put a out to the investor base hey we’ve
3:42got a business you looking to borrow money
3:44and they offer interest all whatever it may be
3:47eight nine ten percent now they just launched the first one
3:51on which is a million-pound bond for investment
3:54in a restaurant chain up in London and they pay 8 percent
3:58I’m over that period so it’s a good way
4:01Vicky bypassing the banks not giving up equity
4:04so you wanna check that out go to crack you drop home
4:08and see how that is working out under constant want wrote that many
4:11on sticking the crowdfunding above-mentioned
4:15quite a few times so where I think banks in crowdfunding and going as regards
4:19partnerships
4:20I took the viewer knows Hampton not eventually banks which are partnering up
4:24with crowdfunding sites hey at the end of the day
4:27banks don’t make money on smaller deals just doesn’t work out at twenty-five
4:32thousand pound loan
4:33the interest is so low why banks make and I’ve always thought the banks will
4:36eventually partner up
4:38with crowdfunding sites well it just happened on this chicks sametime day
4:42when I’m city to tie up with funding circle
4:45with a smaller stuff is now going to pass on to fund in Chicago
4:49I should be interesting to see now which other banks follow suit
4:52I’m so keep an eye on mats secretive Santander customer in time you may see
4:56the same juneau
4:57that loans to small first co over the funding circle
5:01so equity alternative former finance many businesses
5:06and something that many business owners don’t get because if the idea losing
5:09control
5:10of the business by selling shares doesn’t sit comfortably with them
5:14work today have the opportunity to have a chat with house the backs from you
5:17should benchers
5:18a mission ventures help business owners raise equity
5:21I’m by a city funds or via private individuals
5:25try to chance to catch up and early with Alistair and
5:28asking about some of the issues about mindsets
5:32have problems at this is a myth may have when it comes to raising finance and
5:35what business owners need to think about
5:36it’s good for entry now very important remember
5:40that when you are looking for an active s that you will be giving up part of
5:43your business
5:45so that will remain in some cases that you have an investable take a great
5:48interest
5:49in what you’re up to you are therefore under the microscope
5:53this for some people and will preclude it being the right solution
5:57some businesses do not like to run with outside influence
6:00however this can also be very beneficial because often investor will be in
6:04a very established and experience businessperson who can add real value
6:08in terms of the dynamic up running the business someone to has to be absolutely
6:12right
6:13and if not come forward giving up of today and should do business
6:16then alternative to traditional funding methods are probably the best
6:20at best way forward any equity investor that comes in
6:24and this is a very important point to remember will be looking for
6:28an exit strategy so that we’re looking to some a clear times goes to when they
6:32get their money back
6:33be two years three years five years and they’ll be very very interested
6:38and how they gonna get not left of their investments
6:41they want to understand where the business is now
6:44isn’t tidy is a well-run who were the people involved
6:48and most importantly where is the potential now some X investors all
6:53quite daring quite brave and will make
6:57a snap decision based on the personality and the business
7:01have someone to make a decision in in a couple minutes basil my gut feeling
7:05but the majority equity investors will want to really understand how your
7:08business operates
7:10long to understand where the business is going but most importantly where is that
7:14exit
7:15and what return they like the route to achieve upon that excess
7:19so there’s a lot of work to do however it can be great fun
7:23socially useful tips from hours today on raising finance by selling equity
7:27hope you found it useful so that’s it for this week and enjoyed the video
7:31please don’t forget to like it or shared amongst your colleagues
7:34and I look forward to being with you again next Friday to have a great
7:38unprofitable
7:39successfully asi impotriva a point

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