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Business loan or mortgage topup?

  • 10-10-2005 4:52pm
    #1
    Mitchomagic
    Registered Users, Registered Users 2 Posts: 677 ✭✭✭


    Iam in the process of setting up a small company,not looking for millions,just enought to get up and running,I was on to my Mortgage lender and they would offer me a top up on my mortgage no problem at all.Is this a good way to go?.what would be tax advantages/disadvantages of this?.Whats the best route to go?.

    Also one more question,when a company is set up and started selling/trading how soon after that will it have to be registered ?,or will have to be registered before selling /trading?.Was hoping to set and try it for awhile before giving up a FT job?.

    Thanks all advice is welcome...


Comments

  • #2
    i71jskz5xu42pb
    Closed Accounts Posts: 1,806 ✭✭✭i71jskz5xu42pb


    I assume that the mortgage top up would be invested in the company as equity whereas the business loan would be taken out by the business.

    Obviously from a risk perspective you'd like to get all the company's financing from debt - that way if it goes belly up you don't get hit. And the interest paid on the loan can be offset against tax. In addition the process of putting together a loan application will, in itself, make you think a lot deeper about the business.

    That said no bank/sane person will lend you 100% of the money required to start the company. So you'll probably have to invest some of you own money i.e. top up mortgage money. I think you should be aiming to maximise the amount of debt relative to your own investment.

    More here
    http://www.startingabusinessinireland.com/finwhere.htm


  • #3
    onedmc
    Registered Users, Registered Users 2 Posts: 456 ✭✭onedmc


    Topping up the morgtage is generally the easiest and cheapest way of getting the cash needed. You may be able to get a business loan from the bank but you will generally have to gaurantee it yourself.

    You dont need to set up a limited company if u dont want you can have an umlimited. Then you can transfer to a limited at a later date.

    DMc


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