My client is a small brick cutting company, who are proposing to provide a loan to an external party. The company has a turnover of around £120k per year and has a consistent bank balance in the region of around £300k. The loan/mortgage proposal is also in the region of £300k to be repaid over the long term at a fixed rate of interest of 4.79% for the first 5 years?
Firstly, other than the obvious of being able to pay creditors and suppliers when they are due, what are the procedures and tax implications to the company if this goes ahead?
Many Thanks, Jacqui