Loan or Savings?

pramsay13

Sorry if this has been posted elsewhere.
I'm looking for £5000 to buy equipment to start a small business self-employed.
I have that amount of money in savings.
The question is do I use the savings money or get a loan?
I can get a loan at 11% over 5 years, which would mean repaying £6,600 ish.
Does being able to offset the interest payments in my tax return make a difference or the fact that I'm getting next to nothing on the savings?
Thanks

paulwf

pramsay13 wrote: »

I can get a loan at 11% over 5 years, which would mean repaying £6,600 ish.

Firstly - and this is a very important question - is that a commercial loan i.e. is the money intended to be used for business purposes?

pramsay13

That quote is for a personal loan. Why is it an important question?

paulwf

pramsay13 wrote: »

That quote is for a personal loan. Why is it an important question?

I think there are people that know finance 10 times better than me so I stand to be corrected but I think the issues are...

- all personal loans state they can't be used for commercial purposes so you are breaking your loan agreement

- you won't be able to include the loan interest as a business expense unless it is a commercial loan