Help me to help my friend

[Lbnc2021]

I have a very good friend who is dreaming of setting up their own business with premises and stock etc. They have had a very rough year emotionally and have now managed to start being their old self again. However I am very worried they are setting themselves up for a fall and I don’t want them to be back in that dark place.

Basically they have no business sense and seem to think they can walk into a bank and get a business loan for £25000. To add a few points -

1. aged 45 years old
2. make about £700 per month self employed
3. also claim universal credit
4. has just borrowed £40 off me for gas and electric and unsure how they are going to get to the end of the month
5. have no assents at all, no mortgage, no savings. struggle to pay rent
6. family have no way of getting a loan, DM has just been rejected for a smaller loan because she’s on benefits

They think they can get the loan solely based on what they think this new business can turnover, now I’m not saying I know loads about business but I don’t think a bank is going to shoulder all the risk if it goes tits up.

They are very good at the job they do just now but they are spending so much time with their heads in the clouds thinking the money will just be stumped up by the bank that they don’t have time to earn more through that job.

How can I gently persuade my friend to look at other options, I know for a fact when the bank says no they are just going to be plunged back into a depression.

Not a lot of help but afaik no bank will be interested without a thorough and impressive business plan… do they have one? If not that may be a bit of a thought-provoker…

They’ve spoken about a business plan but this is a brand new business that can’t start until they get the loan so they are just projecting. I’m not saying they can’t make it work, I’m sure they can if they had the money but I can’t see it being something a bank would want to gamble on.

There is no way a decent bank would lend them the money under the circumstances. Profits at the moment are purely imaginary. If they haven't even drawn up a business plan, they clearly haven't worked out the full costs of running the business. Business plans can be tense of pages long. Them saying that they will do it one day just won't hack it.

Well the bank will bring them down to earth pretty sharpish.

They do realise they will have to pay that money back, don't they? If the business fails, the loan still belongs to them. Look at the repayments on offer. How could they pay it on their wages? It would be literally crazy to say that the business is certain to succeed.

You are all correct of course. They do tend to be a bit deluded in a lot of ways but there’s just no way of telling them without them then shouting me down. It’s getting to the stage where I want to cut the friendship off because they won’t listen to common sense.

Let them get on with it, they will find out soon enough.

To be honest, I think people like this are incredibly entitled. They have some idea of a business they want to run and can't even be bothered making a business plan. They think someone else should fund that venture. If anyone argues they get angry. It's just pure entitlement and narcissism to think that they will be running a business that makes a profit in the first year when so many businesses fail.

I’m not sure whether I should just come right out with look a banks not going to give you that money.

If I’m honest I am already annoyed with them tonight because their DM applied for finance to pay for a private operation. According to them they don’t credit check pensioners 🤨 lo and behold DM doesn’t get the finance. I got the head bitten off me tonight for saying of course they credit check pensioners. Im sort of answering my own question here…

If I were you then I'd stay out of it completely. Try to listen without commenting much and say things like ´that sounds really interesting´. The bank will tell them no anyway, but let them deliver the bad news and not you. Your friend sounds like hard work and I'd be thinking about creating a bit of distance. Good luck op

True, it’s just hard when the only topic of conversation is this money they are guaranteed to get from the bank and what they’re going to do with it. It’s a shame because their dream is really just a pipe dream but I don’t really have the mental energy to deal with the fall out so making some distance now is a good idea

Keep your mouth shut as she will shoot the messenger.

No bank will lend to her.

I agree. Listen, support, but don’t get involved.

He’ll soon get a reality check when his plans don’t come to fruition.