Company Loans

[aceparts_com]

Having just watched the news reminds me of a loan question I have.

I want to lend my other (newly set up, cash poor) company some money from my 'doing ok' company. Do I have to impose any terms? Do I have to charge interest? I was thinking of an amount in the region of £10-30K

Thanks in advance.

[Eric Mc]

No, you don't have to charge interest. However, the fact that the companies are "connected" (i.e share directors etc) will mean that the terms and conditions and amount of the loan outstanding at the balance sheet date of each company will have to be fully disclosed in the statutory accounts of both companies.

[turbobloke]

If your personal credit and array of cards is amenable i.e. there are credit card cheques, suitable credit limits and a promotional offer on at the time, you could try this:
1. take card A with balance at zero or near enough
2. write cheque from card B to self then on to Company as Director's loan a/c
3. transfer balance to card A using promo of zero % for period of time, then repeat back to B later, or accept 'life of balance' transfer with very low rate below bank's business loan rate
Although I once took out a business loan in the conventional way, this route has provided five figure injections when needed, at an overall interest rate significantly less than I would have paid and more importantly it provided a return on investment that made very worth the while. Depends on circumstances as above and ROI plus timing of same.