Obtaining Start-Up Finance for a Business :: Papers

Obtaining Start-Up Finance for a Business This essay is an advise for Mr. Miyako on obtaining start-up finance for a business. Mr. Miyako wants to open a new Japanese restaurant. A suitable location has been selected in the suburban city of Sheffield, South Yorkshire of the United Kingdom, directly in opposite of the train station, with many bus stops in the vicinity. This place is near the Peak district, which is a nature reserve. In the weekends and in holidays the Peak district is visited by lots of people from the city of Sheffield and Manchester. At this moment there is no Japanese restaurant in surroundings of Sheffield. Estimated cash requirements In this paragraph the estimated cash requirements for the business is calculated. The calculations are based on a new inventory, Teppanyaki tables, a new kitchen and renovation cost of the interior. New inventory (tables, chairs, bar etc.) à ¢Ã¢â‚¬Å¡Ã‚ ¬ 30.000,00 Teppanyaki tables (6 pieces) à ¢Ã¢â‚¬Å¡Ã‚ ¬ 15.000,00 New kitchen à ¢Ã¢â‚¬Å¡Ã‚ ¬ 50.000,00 Renovation cost of the interior à ¢Ã¢â‚¬Å¡Ã‚ ¬ 100.000,00 ----------------------- Total à ¢Ã¢â‚¬Å¡Ã‚ ¬ 195.000,00 Possible sources of finance 10% of the required fund is available from Mr. Miyako's private family funds. 90% of the sum needs to be attracted from other sources. These sources are e.g.: a loan from a bank, a loan from a supplier (like the brewery) or an overdraft. Each of these sources will be described in detail. Loan from a bank A loan from a bank is an agreed amount of borrowed money that needs to be paid back in a fixed period of time with interest. To borrow money from a bank, a detailed business plan is needed. For start-up finance, the maximum loan is often not more than 50% of the required sum. Interest rates at the moment are 6-7 percent. Loan from a supplier Breweries are likely to supply loans to start-up entrepreneurs. In the loan contract the brewery can oblige Mr. Miyako to only use the beer and soft drinks supplied by the brewery. Loan can be in cash, but also