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New business person
09-27-2004, 07:26 AM
Is it better to finance a new business by borrowing money from the bank and offsetting the interest payments against tax.......or to liquidate your savings and use that instead?

akurmang
01-25-2005, 11:35 AM
Use your savings as a downpayment for the commercial loan.

Oakfield
06-23-2005, 09:52 AM
There is one other option that you could consider, Factoring/Invoice Discounting.
If your new business is going to be providing services or selling onto other businesses, then you may be eligible for Factoring/Invoice Discounting.

If you could add a little bit about your new business, i might be able to point you in the right direction.

Look forward to hearing from you

regards

Oakfield

MarkD
06-24-2005, 04:07 AM
No sure cash flow solutions such as factoring will be available to a start up company as I presume turnover won't be much to start off with.

One way of preserving capital is to lease any equipment you need.

Depending on cirumstances a Small Firm Loan Guarantee could be appropriate.

Oakfield
06-24-2005, 04:25 AM
There are Factoring Comapnies who will provide facilities to start up companies. Mine being one them.

If anyone wishes to find out more about factoring, you can email me sales@charterhousefactoring.com or i will reply to any posts on this forum.

Thanks

Oakfield

finstar
07-06-2005, 09:51 AM
I'd have to agree with Oakfield, there are many companies who will provide factoring to start up businesses, though whether factoring is the answer is another point entirely.

MarkD does hit the nail on the head with what he says about leasing finance. We regularly recommend leasing finance to our clients.

pahagwl
02-24-2014, 08:36 AM
I would recommend you to use your savings to finance your business. This is due to the reason that in the early life of business, it becomes very difficult even to make a small amount of profit because it takes time to create a customer/client base. And due to this the amount of turnover is less which means less profit, so it becomes very difficult to cover all the expenses along with the interest payments.

sofieb529
02-24-2014, 09:47 AM
I would recommend you to use your savings to finance your business. This is due to the reason that in the early life of business, it becomes very difficult even to make a small amount of profit because it takes time to create a customer/client base. And due to this the amount of turnover is less which means less profit, so it becomes very difficult to cover all the expenses along with the interest payments.


I agree with this. It takes a while for a business to be profitable and if you have a loan to worry about repaying that would be added stress. Start with your savings. Good Luck!

LindaKay
02-25-2014, 07:56 PM
Using your savings is a pretty good option. I would make sure to hold at least some of it back, though; you never know what could happen, and you need to have a safety net just in case.

cpefley
02-25-2014, 08:57 PM
It would definitely cost less to liquidate your savings first before borrowing money. If it is a worthy investment, you should be able to make your money back and replenish your savings. However, it might take awhile, and your don't want to be paying interest on that money. If it is from a 401K, or other retirement savings, you'll have to pay penalties on the money you withdraw, so that is something to consider.

delusional
02-26-2014, 06:55 AM
Use savings and take a loan to counter taxes. It's the most used way of funding a business because it is both beneficial and you also need a decent amount of savings to get a decent loan.

janineaa
02-27-2014, 05:54 AM
In my opinion, I think it would be better to apply for a loan once you have a stable business planned up. Don't forget to compute interest rates though during financial projections. Once the business is up and running, it will then be easier to pay off the loans, instead of risking losing personal assets.

crimsonghost747
02-27-2014, 06:18 AM
Use savings and take a loan to counter taxes. It's the most used way of funding a business because it is both beneficial and you also need a decent amount of savings to get a decent loan.

This is a great advice! Depending on the country you can subtract the interest you pay from your taxes!

asif bams
01-04-2019, 05:07 AM
While the previously mentioned reasons to refinance are all financially sound, mortgage refinancing can be a slippery slope to never-ending deb

gilsulate
01-07-2019, 12:33 AM
If you could add a little bit about your new business, i might be able to point you in the right direction.

speeduser
12-23-2020, 06:21 AM
Re-financing is really nice. It is simply one of the best things to actually do for the time being. - Steven C Wyer (https://vimeo.com/208354579)