Did you know that borrowing from your company will usually cost you less than borrowing the same sum from a financial institution?
Despite changes to rules about directors’ loans in moves following an attempt by the government to address loopholes, borrowing money from your business remains a potentially tax and cost-effective benefit in kind.
A £50,000 interest free loan from your company could save you thousands of pounds in interest which would be applied by banks on the same amount.
There is a clear financial advantage to a company loan. And if commercial interest rates increase, advantages will be greater.
Of course there’s a downside – as interest rates go down as well as up.
If you’re considering borrowing money in this way, be sure to review your position each time there’s a change in tax or interest rates.
