Financing the company ― overview

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

How to raise sufficient finance to commence and continue operating is one of the most important considerations for most types of business.

There are two ways to finance a company; debt finance and equity investment. A fairly obvious sources of financing is bank finance. However there are also several types of tax efficient investment schemes available, such as the enterprise investment scheme (EIS) and venture capital trusts (VCT). In addition, there are a wide variety of tax reliefs and government grants available, which are often a valuable way to increase the cash available to finance the business.

Obtaining tax advice at an early stage to ensure that any potentially relevant reliefs are actually available can help attract and retain suitable investors.

This guidance note explores some of the options available and the relevant tax considerations for each one.

Loans

Most businesses will have to take out a loan of some sort and the tax implications will differ depending on the terms of the loan and the identity of the lender. There are a number of advantages

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