All Topics / Finance / Using a HELOC to start a business

Viewing 3 posts - 1 through 3 (of 3 total)
  • Profile photo of wade anthonywade anthony
    Participant
    @wade-anthony
    Join Date: 2007
    Post Count: 53

    My wife is starting a business and just wondering has anyone used a home equity line of credit on ppor to do this before?

    My questions are:

    – Is it possible?
    – Is there any tax liabilities in doing so?
    – Does this get messy around tax time? HELOC will only be used for this purpose and no private expenditure.
    – At tax time would it be difficult to prove that it was only used for a business venture?

    Thanks in advance for your answers

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Many small businesses use such products to support their business lending and in answer to your questions:

    1) Yes it is possible with some lenders. Others do not permit the funds to be used for business purposes or wish to charge a higher rate of interest. Check with you lender whether they allow such purpose.

    2) The interest charged on the funds used for business / investment purposes will be Tax deductible.

    3) As long as you only use the account for the business i cant see it getting too messy. Some lenders allow for multiple sub accounts which means you could allocate the individual accounts for specific purposes i.e A/c # 1 = Business expense, A/c # 2 = IP expenses.

    4) Retain all of you loan statement relating to the business account and you should be fine.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of wade anthonywade anthony
    Participant
    @wade-anthony
    Join Date: 2007
    Post Count: 53

    thanks heaps Richard

Viewing 3 posts - 1 through 3 (of 3 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.