Im feeling inventive, do you htink this could work?

bigboyrocky

bigboyrocky

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Have just come up with a business idea, and will look into that more... but whilst trying to be inventive, do you think this could work as a business for when im older....? if i do some buying/selling, but allow people to pay in installments(intrest free)? I know id have to get a half decent amount of money together to keep you going for a while, but ipersonally think it would encourage many more people to buy, because not many people have £15k sat lying around to buy a decent horse? Someone will probably see right through my idea straight away, but i think it could work?

Do you think it could work? What are the pros? Cons?

Thanks
 
Installments sound dangerous for you.

1) They could ruin the horse and refuse to pay the balance
2) The horse could become ill and they refuse to pay the balance
3) They could neglect the horse and refuse to pay the balance
4) They could get into financial difficulties and their assets (your horse) seized
5) They could just not pay

Enough reasons for you? In each case you would need to proceed to court to recover the balance and if they just dump the horse back on you mid payment term you will still take an enormous loss if the horse is less than it was when you sold it.

There is a way around it. You could have an arrangement with a finance company, you sell the finacial package on their behalf. You get the money up front and the finance company take the risk - there are some complications with this but it could be a way forward.
 
A horse on interest free finance?

I think it could be a marmite thing. I am not very business minded so the following may also be blown away by someone who knows their stuff.

A lot of people might be up for the idea, however it would have to be watertight on your end contract wise to ensure that people didn't buy a horse from you, pay the first 10 installments then get bored or have a change of financial circumstances and leave you out of pocket.

You would need an enormous starting pot, otherwise you could start off, then get stuck after the first few horses. Unless you had pretty much unlimited funds this would be a big problem. You would end up £xxxxxxx down, but only getting back £xxx a month, if you see what I am getting at?

Most people would struggle to pay £xxx back on a horse, plus the day to day care of it, plus the almost inevitable competition fees for it (if it was super expensive I would assume it was for a competition!) so although it might seem like the normal persons way of getting a higher quality horse than would normally be within their budget, a normal person may struggle to pay monthly for the horse as well as everything else!

Unless the price of the horse also varied with inflation you could end up ripping yourself off. Without interest you would make less profit, therefore would have a smaller than potentially possible pot for the next few horses.


I know all this stuff is negative, but if you can iron out things like this and work round them, it makes the idea stronger :) Good luck to you if you go ahead with it! :)
 
Hi,

I have seen a couple of dealers offering finance on horses but think this was through a finance house.

In principle the idea is good, think how many people by vehicles and even furniture etc on hire purchase. The difficulty lies in the nature of the item you want to sell.

Options - you sell the finance on behalf of a finance house:

For hire purchase (where the loan is secured on the item you are buying) the loan provider has the security of knowing that they have the right to reclaim the object if the repayments are not made. Fine for an inanimate object but not necessarily ideal for an animal that requires feeding / looking after and could be worthless if injured etc. Finance Houses probably wouldn't go for this option for that reason, also they wouldn't be interest free as they would need to make profit.

Unsecured loan - again wouldn't be interest free but there are plently of banks willing (?!?!?) to offer unsecured loans.

Other problem is that you could well find that you need to look into the Financial Services Authority rules as these can be complex on exactly who is offering the finance and whether you are providing financial advice.

This was you would get the full purchase price of the horse upfront on sale and the risk of recovering the money would transfer to the bank collecting the loan.

Option 2 - offering payment by installments yourself

May constitute some kind of finance deal depending on how you set it up. You would then need to register with the financial services authority and comply with their rules and regulations - this can be costly.

Even if you don't need to do this then there are still quite a few risks associated with non-payment especially if someone decides the horse is not fit for purpose / becomes ill etc. You would also need a high capital outlay in order to keep buying horses in to sell while only getting a fraction of the cost back each month.




In short it's possible to do but maybe difficult for a small business and more feasable for a larger stables / dealers (I think the one I saw had about 40 horses for sale and the finance was done through them selling a banks finance deals).

Hope that helps and sorry if it seems negative!!
 
I also think you need to coomsider carefully what happens if the horse has an injusry part way through the payment - and the person decides they don;t want it as a result.
 
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