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PSYBT Loans...

ScotComp

ScotComp

New Member
Today I had a meeting with the Prince's Scottish Youth Business Trust and Business Gateway about funding that's available to persons such as myself who are under the age of 26.

I was advised that there are no grants whatsoever available this year because of the cuts and they doubt very much that I'd even be able to get a grant next year because they're mainly for the unemployed.

I was then given details of the business loan which is set at 4% interest and can go up to £5,000, they require you to provide a credit report, a business plan, figures for your business and then go in front of a funding panel and answer some questions. The loan would need to be repaid pretty much straight away.

For a country that's trying to bolster it's private sector and get more and more people into self employment, am I the only one that thinks the above funding really isn't good enough?

I appreciate that a 4% loan is a good interest rate but why do they need to charge it if the government is looking for this organisation to become bigger and better and hopefully invest more into society? Why do the businesses need to pay it straight away? Can't they be allow for delayed payments to let the companies get up and running before chasing them for money?

It annoys me that once again I'm being given less support because I'm not unemployed?

Sorry... rant over!
 
stugster

stugster

Active Member
Verified Member
Who did you have the meeting with? I'm pretty sure you don't have to pay it back that quickly.

The 4% charge is probably there to cover anyone who defaults on the loan. One out of 25 might default, and if so, they've covered that loss as a result of everyone paying the interest.

Once you've secured the £5k, you can go ahead with an Accelerator Loan though which is a much larger amount.
 
ScotComp

ScotComp

New Member
The 4% I wasn't really too worried about to be honest, but having to pay it back straight away isn't good. I've got a meeting with them in 3 weeks but I'm not sure whether or not I'm going to go ahead with it not really sure what they can offer that I don't already know.

I'll ask about the repayment period though.
 
stugster

stugster

Active Member
Verified Member
If anything, it's good practice to be able to stand up in front of the panel and pitch your business.

However, it will be much easier to get a loan from a bank if you've got good credit and are willing to guarantee the loan.

Out of interest, what do you intend to use the loan for?
 
ScotComp

ScotComp

New Member
If anything, it's good practice to be able to stand up in front of the panel and pitch your business.

However, it will be much easier to get a loan from a bank if you've got good credit and are willing to guarantee the loan.

Out of interest, what do you intend to use the loan for?
I've done tons of pitches to companies before so I'll be able to do it no problem, I was mainly looking for finance to do some more advertising but I'm just going to stick to my original plan and use my own money it will just take longer.
 
Mike Lewis

Mike Lewis

New Member
ScotComp,

You wrote:

The loan would need to be repaid pretty much straight away.

Are you sure about that? What would be the point?

Mike
 
G

Gouldie0

New Member
Hi Scott,

I think if you have the opportunity to try and get this funding then you should put every effort into getting it. Not everyone gets the chance too and I think you would regret not taking the chance.

There may also be a little confusion around the process you need to follow and because I've just helped someone supply all the financials, this is what I ascertained:

- The loan is repayable over a set number of years 3,5 or 7 and is generally at a far better rate of interest than a bank would give you. There is usually a 3 month period before the repayments start as well.
- Unfortunately there not going to make it easy for you and they want to make sure there giving the money to the right person, so yes you have to supply them with a business plan, previous years accounts and a 3 year profit and loss, balance sheet and cash flow forecast.
- You have to personally guarantee any loan but then you would have to with any bank lending you receive in future.

If you're potentially meeting them in 3 weeks you've got plenty of time to pull this together. If you don't mind me asking, which part of it don't you understand or don't want to do?

Kind Regards

Neil
 
ScotComp

ScotComp

New Member
Hi Scott,

I think if you have the opportunity to try and get this funding then you should put every effort into getting it. Not everyone gets the chance too and I think you would regret not taking the chance.

There may also be a little confusion around the process you need to follow and because I've just helped someone supply all the financials, this is what I ascertained:

- The loan is repayable over a set number of years 3,5 or 7 and is generally at a far better rate of interest than a bank would give you. There is usually a 3 month period before the repayments start as well.
- Unfortunately there not going to make it easy for you and they want to make sure there giving the money to the right person, so yes you have to supply them with a business plan, previous years accounts and a 3 year profit and loss, balance sheet and cash flow forecast.
- You have to personally guarantee any loan but then you would have to with any bank lending you receive in future.

If you're potentially meeting them in 3 weeks you've got plenty of time to pull this together. If you don't mind me asking, which part of it don't you understand or don't want to do?

Kind Regards

Neil
There's no confusion, I understand fully what I need to do with the loan and have no problem giving an interview, business plan, finance plans etc.

It's the fact I need to repay it back over X many months straight away rather than after say a year or two years of trading.
 
stugster

stugster

Active Member
Verified Member
Scott, when you say repay it, do you mean the whole amount or just starting to repay it?
 
Mike Lewis

Mike Lewis

New Member
Ah, I see. You mean you will have to start repaying it straight away.

I can only say that that is completely normal. It's unusual for the start of repayment to be deferred for this sort of loan.

Mike
 
Scottish Business Owner

Scottish Business Owner

New Member
Hi Scott,

There's some really good advice in this thread but I'm surprised that no one has packed up on why you actually need these funds. I think it would be hugely unlikely that you would get funding to actually advertise your business so I think in that respect if you are going to go ahead then you need to rethink this.

Like Mike says repayment of a loan starting with a few months of receiving it is pretty standard in every scenario. I would be interested in hearing why you think this is an issue?

I think I would be taking a step back and seeing where your business is at present, there are lots of ways of generating business that don't involve payment for advertising. Just my 2p worth :)
 
craig_mckenna

craig_mckenna

New Member
I would also be curious to know what the plans are for the money, there could be other schemes or grants available for certain expenses.
Happy to take a look.
 
ScotComp

ScotComp

New Member
Ah, I see. You mean you will have to start repaying it straight away.

I can only say that that is completely normal. It's unusual for the start of repayment to be deferred for this sort of loan.

Mike
I know it's common but I just think for the govt to try and get more people creating businesses they could do much better, why not bring a system in place that is similar to the Student Loans but rather than them collecting the payments after the person reaches an income threshold they could do by a certain amount of trading years.

For example, they give me a £1,000 loan (as an example) and the company don't start paying the loan back until after say a year of trading, it would be much better for the company and the govt would still get their money back because of the personal guarantee on the loan and hopefully get better results from the organisation.

I appreciate everyone trying to give me advice on the funding, but I'm looking to discuss the actual loan and how the government could improve it rather than what, how, why I'm looking for a loan but thanks for taking the time to respond :)
 
Mike Lewis

Mike Lewis

New Member
Scott,

I take your point. But, personally, rather than worrying about what the government can do or might do or should do, I'd be looking at my own resources and initiatives if I wanted to start a new business.

Mike
 
G

Geoff Leask

New Member
Scott

Many thanks for considering the potential support that Prince's Scottish Youth Business Trust (PSYBT) has available for young people in Scotland who wish to start a business.

PSYBT has a comprehensive package of support available to young people who are considering starting a business including Market Test Grants (where appropriate) Start-up Funding, Growth Funding, as well as a full package of "wrap around support . All loans are re-paid at a timescale that suits the business needs.

PSYBT does offer an initial start up loan of up to £5,000 at a 4% interest rate and as you rightly state there is a structure to application which has helped over 10,000 businesses in Scotland to start up in the last 22 years. There are occasional grants available upon fulfilment of certain criteria however these are a small part of our overall funding package.

There is a great deal of information at our website: http://www.psybt.org.uk/starting-your-business

PSYBT is supportive of all young people with the will and determination that is matched to a good business plan.

Please get in touch with me if I can be of further help

Best wishes

Geoff Leask
PSYBT Director of Operations
 
Scottish Business Owner

Scottish Business Owner

New Member
Hi Geoff,

Appreciate you taking the time to respond in the thread. The PSYBT is a tremendous organisation and i'd certainly welcome the opportunity to talk with you more about SBF and the other plans we have as I do think they align well with PSYBT :)
 
ScotComp

ScotComp

New Member
Geoff,

Thanks for replying to the thread, I can't criticise the PSYBT they've been great with what's on offer and have given me a lot of information.

Scott.
 

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