Consolidate Business Loan with Personal Loan

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MikeB1977

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Apr 12, 2009
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  • #1
    Does anyone know why Barclays or NatWest will not give my friend a personal loan to consolidate his business overdraft / loan?

    Is their a law against loaning someone money for paying off a business loan?
     
    B

    businessfunding

  • #3
    The first question would be - why hasn't your friend applied for a business loan?

    Second question - most important is can he illustrate that he can meet repayments?

    The second will apply whether he does it honestly or fraudulently
     
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    Duke Fame

    Duke Fame

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    Jan 28, 2008
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  • #6
    jason.parker.86 said:
    Does anyone know why Barclays or NatWest will not give my friend a personal loan to consolidate his business overdraft / loan?

    Is their a law against loaning someone money for paying off a business loan?
    Click to expand...

    No law as suchbut your pal would have a problem with interest paymets. The directors loan he makes to the company (assuming limited co) will be separate to the original loan. The company cannot claim back th einterest as an overhead unless your pal charges interest to the company for which he will create a taxable income but can't claim relief on hte interest he pays. The question is why would he want to do it that way and why not guarantee the loan himself?

    The bank may be a little concerned, lending £10k for a car means that should things go wrong with him, he can sell the car and at least release some money back to repay. He can't get that money back if it's in hte woring capital of the business.
     
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    lisawill

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    Apr 24, 2013
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    9 Novelty Lane Suite 9B
  • #7
    Not any regulation because suchbut your current pal might have trouble with interest paymets. The administrators personal loan he can make to the business (assuming restricted co) is going to be different to the authentic personal loan. The organization are unable to maintain returning th einterest for over head unless of course your current pal prices interest to the business which is he'll almost certainly develop a taxable revenue nevertheless are unable to maintain reduction with hte interest he will pay. The dilemma is why might he wish to accomplish the idea like that and have you thought to assure this personal loan themselves?
     
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