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Loan Account Redemption

When any business starts out, it requires funds, possibly through financing to be able to purchase any essential equipment, stationery or other items, as well as be able to pay the regular expenses like salaries, telecoms, rental, etc. When a business has no assets, there are only two ways to raise this financing, either by issuing shares or borrowing money. Because the owners do not want other people involved in the business, they normally rely on the loan method. The simplest route would be to go to a bank or other lending institution, but it is important to remember that these all ask for security and charge interest on any loan. If the business is not able to provide sufficient cash flow to meet this obligation, the alternative for the owners and/or directors is to make a personal loan to the business. The terms of such personal loans are normally agreed informally with no written contract, with no fixed term and do not reflect the payment of any interest. The balance sheet of the business reflects the loan and interest as a long-term liability that only needs to be repaid at an indeterminable future date. The need The need of the business is therefore to be able to repay the loan on demand if called upon to do so by the owner/lender when the owner/lender wants to retire. If the business is not in a position to settle the loan at that time, it might be declared insolvent, thus negatively affecting all concerned. Proper financial planning can avoid such consequences. The solution The solution is to structure the repayment of the loan over the term between the current time and the anticipated retirement date of the owner/lender . This will ensure that the minimum financial stress is put on the cash-flow of the business and that the business can repay the loan in the most tax-efficient manner by the required date.
Loan Account Redemption Loan Account Redemption Loan Account Redemption Loan Account Redemption Loan Account Redemption Loan Account Redemption Loan Account Redemption Loan Account Redemption Loan Account Redemption Loan Account Redemption Loan Account Redemption Plandirect  By Financial Advisors & Brokers in RSA
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Loan Account Redemption Loan Account Redemption

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