Directors Loan to Buy another business

[craigy1874]

Second company

If the loan is to fund a business acquisition, you may want to consider setting up a second company and loaning it funds from your contracting company.

[BrilloPad]

Have you seen this thread? http://forums.contractoruk.com/accou...oan-query.html

Note especially post #2.

[MikeHowarth]

Hi all

I was wondering if you can help me.

I have recently began discussions with a view to buying another business, its still early stages as I go through the due diligence however I'm beginning to think about the finance side of the transaction.

Whilst I could potentially afford this out of my own personal savings it would be a stretch and leave me with little contingency for day to day eventualities, therefore I've began thinking of alternative ways to fund the transaction.

I currently have funds within my company therefore I was considering whether a directors loan may be a feasible way to do this.

Is there anything I should be aware of in terms of the timescales for this? Is this something which can bridge accounting years, or does it need paying back before year end?

Many thanks in advance.

Mike