Business loan or personal?

spdunky | 00:34 Fri 27th Oct 2006 | Business & Finance

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Hi i am starting a new business with a partner we need �30000 to start, is it better to get 2 personal loans for �15000 each or a business loan for �30000? what are the advantages and disadvenatges of doing either? is one way better for tax purposes? hope someone can help.

income protection

partnership or limited company?

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Oneeyedvic

As a new business, you will be very lucky to get a �30,000 business loan which is not secured by way of property. If you do go down this line, there can be advantages with regards to claiming back the interest portion of the loan.

If you have a �15,000 personal loan, you may find this more difficult than you think as lenders are going to want to see your trading accounts before they give you a loan - to ensure that you can repay the loan.

With regard the tax purposes, I am fairly sure that this will depend on whether you are a Limited company or a partnership.

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