Business Owner Struggles to Keep Up with a Payday Loan
In this blog we are taking a look at another example of a George Banco customer and their reasons for choosing George Banco to provide their guarantor loan.
Please note – names have been changed for data protection purposes.
We had an application come through the system for a young lad called Ian. Ian was a small business owner and had been in business for just under two years. In that time his business was bedding in nicely. He wasn’t making a fortune but he was certainly providing for himself and his family.
Ian then experienced a small issue with his work van whereby he needed a few hundred pounds for repairs but couldn’t afford it directly himself. He looked to the banks to apply for a small business loan but was turned down due to lack of accounts. They wanted to see at least two years of accounts whilst he has been self-employed. It was exactly the same when he looked to apply for a personal loan.
In a bit of a panic Ian then went on to the internet and saw an advert for a payday loan and so made his application. His thoughts were to borrow the amount needed, fix the van and get it paid off the next month in full. He received the funds, fixed the van and got back to work.
A month later Ian came to repay the payday loan but found that with the fact he had not been at work for a few days whilst the van was off the road, his earnings were down and could only afford to repay the interest on the payday loan. He then thought that next month after he had worked a full month he would be able to then repay the full payday loan amount and clear the debt. However, another month passed and again he was only able to repay the interest.
Ian’s business was turning over a reasonable amount on a month by month basis but sadly most of that revenue was being ploughed straight back into paying off the interest on the payday loan.
Ian’s business was turning over a reasonable amount on a month by month basis but sadly most of that revenue was being ploughed straight back into paying off the interest on the payday loan. It was at this point that he knew he had to do something different to break the cycle and get back on an even financial keel.
Now fairly disillusioned, Ian saw an advert for a George Banco guarantor loan and called our customer service team to understand what a guarantor loan was and whether it could help his situation.
Ian spoke to one of our customer service representatives who listened to Ian’s recent experience and was able to provide him with the information he needed to make a more informed decision. After a short amount of time Ian had completed an application and following the relevant checks agreed that his father to act as a guarantor on the loan. Ian’s father had a good credit rating and was happy to cover the outstanding repayments should anything happen to stop him from being able to make them on time.
Ian had proved to George Banco that he could clearly afford the repayments and agreed that the repayment schedule was easily achievable. He went on to accept the guarantor loan and used the funds to pay off the payday loan and the interest in full. He has since made every repayment on time and has made a good start developing a healthy credit history.
On checking in with Ian very recently he is looking to have the guarantor loan repaid in full a month early! He also mentioned that due to having a better credit history, he and his partner are considering making an application for a mortgage once they have more than two years of accounts. Something they never thought they would be in a position to do.
If you have had a similar experience and would like to talk to one of the team here at George Banco about your circumstances then don’t hesitate to get in touch. There is a good chance we could help you too.