Can My Business Lend Another Business Money?

[MrSparks]

I have an existing business with enough cash funds that I need for my new start up business.

Is there a way that I can lend some of the money to my new start up business?

Both business are ltd companies, no group structure, the start up business I own 50% of with a business partner. I'm not interested in receiving any interest or anything, not bothered about trying to avoid CT in the existing business either, just trying to find the most effective way of putting the start up money in as I don't have much actual cash right now!

It's not a substantial amount of money, just under £5000 for my half of the costs.

[Birkin1932]

Yes, no problem. Your accountant will sort it as a loan at the year end.

[Eric Mc]

Just ensure that these loans are genuine loans and are/will be repaid at some point.

If you are operating two distinct companies you will have numerous reporting matters that need to be mentioned in the company accounts, including their level of indebtedness to each other.

[MrSparks]

Eric Mc said:

Just ensure that these loans are genuine loans and are/will be repaid at some point.

If you are operating two distinct companies you will have numerous reporting matters that need to be mentioned in the company accounts, including their level of indebtedness to each other.

Yeah I definitely want the money back, 100%, and ASAP.

It's just easier if the company can lend the new company the money rather than me taking a dividend, getting taxed and then lending it to the new start up.

It's either that or to stick it on a personal credit card.

[Tuna]

Eric Mc said:

If you are operating two distinct companies you will have numerous reporting matters ...

Could you expand on this at all? I've been thinking about setting up a second company to handle a different business opportunity and want to find the easiest way to do so. I don't need or want payment from the second business, but need an entity that can have a merchant account and show an independent profit / loss whilst I figure out if the opportunity is actually worth pursuing full time.