Business/Personal banking

markiee24

Hello,

Its my first post so please go easy on me. Great site by the way.

I have a small Business and bank with one of the so called big four. I also have my personal banking with the same bank.My company were told before xmas that we are to lose a big contract with immiediate effect. This means we will have a maasive gap in company income for months ahead, in effect my salary will have to be halved, i am going to struggle to pay my personal outgoings,so am thinking of approaching my bank/credit card companies for some extended time to pay my personal debts. However my company will recieve large payments into the company account for months to come approx 90kover the next four months. Most of this money is owed on company debts, tax,vat etc. If i approach my bank for reduced personal payments on loans etc, coud they dip into my Business account for monies owed to them? Are they allowed to offset my Ltd company monies to pay my personal debts? I have 85% shares in this Company?

Will credit cards companies talk about reduced minimum payments? reduced interest etc?

jonesMUFCforever

If you are a sole trader yes they can in theory but otherwise you should be safe.

olly300

The company is a separate legal entity from you. The bank cannot take money out your company account to pay you or vice versa.

However what they can do is refuse to reduce payments on personal loans as they can look at your business account and see there is money there, therefore it's always advisable to separate your banking into different banking groups/building societies.

So you should business bank with one, have personal current account with another, have your credit cards with another and your main savings with another.