Tanya’s credit record did not stop her expanding her business
This is a real case study from a client that was funded through Guarantor Loan Comparison. The name of the individual has been changed for confidential purposes.
We all like a happy ending, don’t we?. Well, when Tanya (aged 26) approached one of our guarantor lenders for a loan to expand her business she thought it unlikely.
She was self employed, had several late payments, a judgement from a few years back from her time clubbing and generally enjoying life and a failed loan with her Bank.
She was working from home (her parents) doing eyelash extensions and infills for family, friends and friends of friends. She had been trading for over a year and had her first tax return which showed a profit.
She wanted to borrow £6,000 to convert the garden shed into a studio, add another beauty couch and take on her first employee as well as pay of a credit card debt and the remainder of the failed loan. To her credit her drive, ambition and business acumen were very impressive and she had the support of her family.
Typically, Tanya was finding it hard to make ends meet. Her overheads weren’t that high (she was living with her parents), but she had an expensive loan to repay, rent to mum and dad and was finding the business expenses hard to meet, hence extra money from having her own studio and making extra money from a co worker would make all the difference. She had worked out that after paying her debts and creating some working capital for her business, she would be better off financially as the new loan would be cheaper than her current repayments.
Initially Tanya approached her bank to help and, after supplying a full business plan that took some time, and an Income and Expenditure statement, she was turned down for poor credit. She then applied on line to the usual comparison sites for a regular high street loan, again she was not approved by any.
She eventually applied for a bad credit loan online and came across ‘Guarantor Loan Comparison’, a comparison site that offers a collection of companies offering financial products with a guarantor.
The site made it clear that a guarantor loan included the co-signing of another person and it gave her all the information she needed to make an informed decision based on her options.
She was also able to use the sites cost calculator to work out the best term and the most affordable monthly payments based on the rates offered by each lender.
Whilst she was dubious, armed with the information Tanya went to Mum and Dad and explained that she could get the loan she required but would need their help to act as a guarantor.
Dad being Dad, went online to the site and satisfied himself that Tanya wasn’t heading for an expensive loan that would get more onerous as time went buy, making it impossible for her to repay. Satisfied that all was well the three of them sat down together and applied to the Lender that best suited Tanya’s loan size and term.
Within a couple of minutes Tanya received a call from a friendly advisor who took all of her details including her monthly income and expenditure. The advisor talked through the need for Tanya to be able to afford the loan and asked questions as to what the loan was for, and to Tanya’s surprise she was told, based on the information provided and a satisfactory guarantor her loan was approved.
The advisor then spoke to Dad, who after grilling the agent about the pro’s and cons etc. gave the information requested. The processing and the paperwork was very easy and straightforward and after 3 days Dad had received the loan in his Bank which he transferred to Tanya.
This is a standard security measure by most guarantor lenders. The money is sent to the guarantor’s bank account first to ensure that the money is going to a person with a good credit history. That individual then has the option to pass on the funds to the main beneficiary in one lump sum, or instalments if they would prefer to stagger it. They also have the option to give the money back to the lender with no extra fees involved within the first two weeks – known as the cooling period.
This loan enabled Tanya to develop her business and realise her dream. Her poor track record when she was younger did not stop her getting the funds she required. Unlike most high street lenders rejecting applicants because of their past, the guarantor lender backed Tanya based on her future potential.