Cheapest way of raising finance for a new co...

[aceparts_com]

My head hurts.

I'm looking at different ways of raising money for my new business, probably £50K.

I could:

Bank loan over 5 years @ 8.25% fixed (straight forward deducatable against tax)

Personal Mortgage @ 6.25% fixed (but then have to charge the co interest etc, mess around with self asessment etc)

Any other ideas? The extra interest paid over a 5 year period is next to nothing.

[petros]

Stick em Up Ma

[Eric Mc]

If you borrow personally to raise funds to invest in a company by buying SHARES in the company (as opposed to "loaning" the money to the company), then you can claim the interest charged on those borrowings as a deduction against your own personal income.

The "return" on that investment would be dividends, which, of course, only attract Income Tax if you exceed the Higher Rate tax bracket in the year.