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October 23, 2019 at 10:56 am #999827Glenno327Member
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Read through a lot of your stories and I cannot believe I stumbled upon this forum! I have been googling for days and this has been here the whole time. It’s great nice to meet you all. I’ll get on with my small story and questions if someone could help out that would be great.
I am currently managing a big scaffold company, and I have decided to go out on my own contracting to the company I am with. I will be given their contracts and should have plenty of work to keep me going which is great. Unfortunately I cannot go as a soul trader, and require to run as company and have myself on the payroll. Now for obvious reasons for the first few months I will be having to pay myself peanuts to make some income up which I have no real issue with I just have a couple of questions and hoping someone could shed some light on this for myself just mainly with money.
I have to take out a large loan to start the business, but currently can only get a personal loan to cover the costs. My question is, is it possible to pay the repayments out of the business account and not out of my own wage or would I have to just compensate for the costs in my wage?
The only reason I have to take out personal loan is because I have no assets or mortgages and have not been trading for long enough to receive a business loan.
My other question is pretty much the same as above, I currently have a vehicle under a novated lease with the company I’m working with so I do not pay for it, but I will when I leave the company to start my own. Would it be possible to transfer a lease over to a company just starting off or have repayments paid out of the business account.October 24, 2019 at 4:09 am #1221532Paul – FS ConciergeModerator
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Hi And Welcome to Flying Solo [USER=116206]@Glenno327[/USER] . It is great to have you!
Thank you for joining our community and posting.
Q1 – You will actually be contractually required to notify the financier that you don’t have a job anymore and they may alter or withdraw the finance if you do so. If you don’t do that, they will generally be happy to receive your payment from any account.
Q2. You would need to re-finance the car.
You should see an Accountant to get advice.
CheersOctober 24, 2019 at 6:05 am #1221533Jason RamageParticipant
- Total posts: 3,161
To follow on from Pauls comments, technically banks should not issue you a persona loan IF the intended use is commercial usage.. Many an argument has been had and presented that banks offer this to those that wouldnt normally get the commercial loan across the line, although if this was ever pushed the banking ombudsman would be interested in reviewing this practice.
Commercial loans and Personal loans have very different criteria and for a good reason…
Cross your t’s and dot your i’s is all i can strongly advise.
CheersJason Ramage | Lucas Arthur Pty Ltd | E: firstname.lastname@example.org P: 61 3 8324 0344 M: 61 412 244 888October 25, 2019 at 9:32 am #1221534JamesMillarParticipant
- Total posts: 1,685
Ok I think it’s a bit simpler than all of that.
A novated lease is a tri party lease contract between lessor, lessee and employer. They are specifically designed for salary packaging and tax effectiveness. The finance companies are fully aware that the vehicles are being used on a salary packaged basis which does not necessary mean they are commercial vehicles because salary packaging cars for FBT under the FBT statutory fraction method does not rely on business use log book numbers. Most novated leases will generally allow transfer to a new employer including a company that you own / part own. The novated lease may not give the finance company the right to terminate provided obligations are met – these contacts are made with the understanding employees often move and re-novate to new employer. They are pre vetted on that basis.
So there is a good chance you can transfer the novated lease to your new company. – but you will need to check the contract.
And yes you can generally still claim interest on the personal loan because you will “on lend” the personal monies to your company.
Speak with an accountant before you do anything. Good luck. Scaff can be quite lucrative.
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