Do we have to risk our house to get a loan?

Q My husband and l are thinking of going into business and would, therefore, need to borrow a substantial amount from the bank. Whilst we are aware of the need for a good business plan, we are concerned that we may have to put our house at risk. If the house was in my name and the business in my husband's name would this eliminate the risk of losing our home?

PT

A The short answer is no, unless the bank is very careless.

What a bank requires before agreeing to a loan is collateral, which they can get their hands on if you default on payment of the interest etc. If your house is the main collateral you can offer, then the bank will make absolutely certain that they can use it for repayment of the loan if need be. The conditions, and charges, the banks demand for giving even only relatively small business loans are horrendous - as l have personally experienced. They want belt and braces for themselves at the cost to the borrower.

Despite their public claims, banks are not really interested in backing start-up businesses, which is why they make the terms so onerous. I would strongly advise you to look at other ways of raising the money.