What to do?

Dingledell

I approached my bank for a loan 50k, they said is wasn't possible because of a business at the premises. I then looked for a mortgage,  doable but would need to take out a building warranty insurance at around 9k, as a new build property. Thinking about other ways to finance my project, I can now probably raise 30k cash, but need to borrow 20k. There are three banks that say 'Highly Likely' to be approved including my own, (all part of the same group). So my question is do I ask my own bank? Under loans - other? Or ask one of the others?

retiredbanker1

Did you ask as a Business or Personal account for these loans?

MEM62

What kind of 'project' are you financing and what type of loan did you apply for?  

Dingledell

I asked my current bank for a Personal loan, (not a business loan, which is obviously more expensive), as it is to install mains electric, to my main residence which has an annexe attached to it used as a holiday let. 

retiredbanker1

Dingledell said:

I asked my current bank for a Personal loan, (not a business loan, which is obviously more expensive), as it is to install mains electric, to my main residence which has an annexe attached to it used as a holiday let. 

Personal Loan interest cannot be used to set off against tax as a business expense -a business loan would.

Nomunnofun1

retiredbanker1 said:

Dingledell said:

I asked my current bank for a Personal loan, (not a business loan, which is obviously more expensive), as it is to install mains electric, to my main residence which has an annexe attached to it used as a holiday let. 

Personal Loan interest cannot be used to set off against tax as a business expense -a business loan would.

If the personal loan can be shown to be used for business the interest could certainly be claimed as an expense. This would be in exactly the same manner as if, for example, the loan was used to buy tools or equipment. 

https://www.gov.uk/expenses-if-youre-self-employed/legal-financial