buying a franchise with an IVA

[p_r]

I have been paying into an IVA arrangement for 2 years with 3 years left to run. I have £40000 equity in my property (the IVA company have a charge on my house)and I am looking to purchase a franchise for £30000. Will I be able to buy a franchise with an IVA gainst me and what is my best option for funding this venture?

[catullus]

It's extremely unlikely that you will be able to do this within the IVA. The main reasons are that presumably the equity is reserved for a remortgage in year 4 so you won't be able to use that for funding, but more importantly there will be a restriction on you borrowing.

Even if you could find the money (say from a relative)you would need personal credit to fund the working capital of the business and you wouldn't be able to incur further debt under the terms of the IVA.

In addition, so radically changing your source of income would undermine the commitment that you have to make contributions in to the IVA because in the earlier months of starting any business income will be very erratic.

So, for all of these reasons, I really can't see that this is a possibility within an IVA.

[Adam Davies]

Hi
You will find funding impossible from a bank etc as you will need your IPs permission and I doubt if a bank will be interested because of your IVA.You could use a third party[family or friend] But as Catullus states you are taking a huge risk and could end up with a failed IVA and possible bankruptcy.
It,s probably better to bite the bullet and crack on with your IVA for the next three years then you will be free to do as you wish.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp