£470,000 Low Interest Government Loan For City of London Retailer

Wanting to start your dream business but realizing you don’t have the funding needed to make it possible is heart breaking. This is exactly what was happened to Marco from City of London.

As a retail store manager, Marco had been in the position for 8 years and love his job. However the moment came that the clothing and accessory store was going up for sale from the current owner who wanted to move on to another opportunity. Rather than risk his long time career (dependent on new owners), Marco took it upon himself to see if he can be the new owner.

Calculating the amount of money he had, and how much he could save over the next few months – it wouldn’t have been enough. Asking family and friends, visiting every bank and trying everything he though was possible – ended up not being possible. Marco was out of luck.

Luckily, he was able to find UKStartups which changed his entire career, and here is how!

*The following is a transcript of our conversation with our fellow member, Marco Houghton from City of London, England regarding his small business success story.

How did you end up working at the store?

I started working at the store when I was 19 to be able to pay for school. I took Business Communication at the Brunel University in Londonso it was pretty expensive. After a few years working there I worked my way up to a store manager. This allowed me to make some money and turn my own ideas of the perfect store into a working model. It worked very well and Danny, the store owner was very happy with my work.

How did you feel when you found out the store was going up for sale?

When I was told the store was going to be sold so the owner can move on to other opportunities I was pretty disappointed, however I did feel it was coming. Danny told me about it and said he will put in a good work to the buyer to ensure that I have a job. That sort of scared me, since I didn’t even think of the idea that I could actually be fired – for no reason.

What made you want to take over the store?

I didn’t really think about it until the moment I though about being fired and having to find a new job. After working there so long I didn’t feel I knew anything else. I said to myself, I know what im doing, I know how to make it better…all I need is to make it mine.

How did you go about asking the store owner for a deal?

Just straight up said “Hey listen Danny, would you drop the price of the store a bit if I was to try and buy?”. He laughed at first, but the realized I was serious and he said, yes let’s make it work. This gave me hope.

What did you do next?

I went home that day and I took a notebook, opened up all of my bank accounts, credit cards, stashed away cash and started counting to see how much I had. It wasn’t close at all, but I thought that would be a good down payment on a loan. The store was going to be listed (with all inventory and all) at £398,000 which was huge. I had approximately £25,000 saved in a few accounts and the rest I would see if i could get as a loan. I did own a house and a car.

How much did you have and need?

I had around £25,000 and needed a lot more. I actually ended up asking my parents and they said whatever I put in, they will match it to ensure I can make it happen. Danny also said to me that he will drop the price of the store as much as my salary is until I am able to purchase. So that would be perfect. My next step was to go to the bank and see what I can do.

What happened when you went by the banks?

They said No. HSBC, Bank of London and Bacrlays all said no. My credit wasn’t good. I had debt from my school still, my car and my mortgage. I wasn’t making enough to be able to cover an additional expense of a loan of that amount. Considering the amount of the store sale, the profit to owner was as much as 2 of my salaries, and supposedly that wouldn’t have been enough to make it work.

How did you find UKStartups?

Well that night I gave up and I was writing an e-mail to Danny to let him know I wouldn’t be able to continue. I said to myself, let me see other lenders online who have loans that I may be able to get. I remember seeing ads for bad credit, poor credit, no problem. I was desperate. I saw an ad that said “starting your own small business – find funding now”. I clicked it and it took me here to UKStartups.org. That was the begging of it.

What convinced you to register?

The fact that you guys had private investors. I thought that this was my way to go. If I can get some money from a private investor I wouldn’t mind sharing my business profits. I mean, it means that I would keep my salary at least. Plus the fact that the cost to access all the info was just £239, and your reviews are spectacular from past members.

What benefit did you have by using our platform?

When I started using the platform, I contacted probably 20 investors, but they all said they need a business plan. So I started working on that using your Business Plan Tool. It was real helpful to me and I couldn’t stop. I think this is the main reason why I ended up actually getting funding, because I re-wrote the entire business for the better.

What was your first step?

I completed my business plan and contacted government funding agencies for grants, for loans as well as those private investors I mentioned. It felt like a numbers game.

How much funding did you look for?

I was looking for £300,000 in funding, in any form. I needed this much to be able to take over the business.

How did you find the programmes?

Using your funding database I was able to connect to a very specific programme which was perfect for my situation. Once the programme adviser reached out, I was able to share my business plan with him and he suggested a lot back to me, to help me improve it. Not sure why, but it felt as if he was really helping me and telling me what to do and how to get funding. So this was a real benefit to me.

How long did it take?

Once I was approved for funding, it took about 3 weeks from start to finish of the application and I had to provide my bank information to have the funds transferred. It was pretty quick considering that I read usual funding takes 3-6 months.

What kind of funding did you get?

I applied for all kinds of funding, but the programme that got back to me was a low interest government backed loan. I was able to speak to the adviser of the funding agency, and he took me under his wing and worked with me very closely for about 2 weeks until I was able to provide him with everything he asked for.

How much funding did you get?

Because I re-wrote the entire business and put all of my un-used ideas into it, the agency director I worked with made a few suggestions. I asked for funding to be able to take over the actual store (the sale), and I also asked for additional funding for hiring and training staff, and for further location improvements. The funding I was allocated with totaled £470,000, with additional cash flow funding available if I was to need it.

What is your next step?

I’m taking over the store at the end of this year and my goal is to remodel a little bit, hire some help and starting making it my dream business. In fact, Danny was so impressed that he dropped the price down further and asked to stay as a partial owner to help with future moves and the operations side.

What is your advice to others?

When you really want something, don’t give up. In my case, money was the obvious problem but with some luck and help from UKStartups I was able to find and access funding that I didn’t even think of. I would suggest you take a look at UKStartups, their business planning tools as well as their funding platform. It is extremely useful. My other advice is to take your business plan and run with it. Make it the best damn business plan you can. Because my bad credit, my lack of equity and in-experience that the banks said wasn’t good enough all proved to be nothing in comparison to my well developed plan – which seems to be the main thing the government agency looked at.

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