Question on Business Loan

tksnota

I’m wondering if a business loan should always be credited to the business account 

My question is a loan was approved based on existing business financial health but the funds were deposited into my personal account

Will this be considered a personal loan? I’m paying for the loan and the lender’s name was appearing in my credit files together with my other personal loans

DullGreyGuy

Are you a sole trader or do you operate a limited company?

tksnota

We operated in a limited company and I’m not even a director only a shareholder. It caused confusion on me about this loan

DE_612183

The money should have gone into the Business Account of the Ltd Company.

The funds to pay the loan off should also have come from the Business Bank Account.

Hoenir

tksnota said:

My question is a loan was approved based on existing business financial health but the funds were deposited into my personal account

Will this be considered a personal loan? I’m paying for the loan and the lender’s name was appearing in my credit files together with my other personal loans

Sounds as if it is a personal loan, In your name. Funds in your account. Why didn't the business i.e. the directors apply for the loan? 

tksnota

One of the directors avail of the loan the others don’t want so I was requested to apply which I did

Is my understanding correct that a business loan should be 1) deposited into the company’s account not on personal one,  2) that only directors were entitled for business loan and not shareholder like me and 3) is it normal that a lender used a company’s income statements to approve a personal loan because this confused me a lot

DE_612183

There is a lot which is not clear here.

Did you apply for a personal loan which wqas to be used for the Business?

Or did you apply for a business laon, and just used your bank details for the credits and debits.

These are two different things entirely and depending on which it is will determine the answers to 1,2&3 above.

tksnota

I applied for a loan to be used for the business which is the reason required the income statements to determine the amount of the loan and used it as the basis of approval

But the lender also requested my employment details, 6 months bank statements plus payslips and my house if mortgage 

after the approval, the money was deposited into my personal account because that’s what the lender wanted and been paying the monthly fees using my own money 

I hope I make myself clear

DE_612183

I think you have to consider this a personal loan.

noitsnotme

You would not have been able to obtain a business loan for the limited company as you are not a director. 

It is a personal loan in your name and has nothing legally to do with the limited company.

DE_612183

as others have said - any money that you "give" to the company you should get a reciept for, and the company should pay you back at some point.

Who currently pays the loan?
How long is it for?