Seed Capital Funding

margot

I have started a business and applied for a business loan of 30,000€ which has personal guarantees attached to it. I have also received a grant from the Local Enterpise Board. I would like to apply for Seed Capital Funding. Apparently because this is not a personal loan it won't qualify for the Seed Capital Funding. Is there any way around this situation?

srsly78

Yes, save 30 grand or have a whiparound amongst relatives.

Mr. Incognito

margot wrote: »

I have started a business and applied for a business loan of 30,000€ which has personal guarantees attached to it. I have also received a grant from the Local Enterpise Board. I would like to apply for Seed Capital Funding. Apparently because this is not a personal loan it won't qualify for the Seed Capital Funding. Is there any way around this situation?

Who told you this? There is nothing in the legislation that differenciates between a personal loan and a business loan

margot

I called the Revenue Commissioners and spoke to someone in the Seed Capital Funding Department and was told that an investment of a business loan into the company (even with personal guarantees) is not acceptable and it should come from my private funds!

Mr. Incognito

I think that you should ring them back and say that you require that in writing and the statutory authority for that and they may change their tune right quick.

They are oblidged to furnish you with this under the Revenue Customer charter.

Is the loan made out to the business i.e in the name of the business?

margot

Ok. I'll try that. Many thanks. The loan is in the business name.

Mr. Incognito

Hmmm,

well if the loan is in the business name it is technically income of the business.

I'd still ask for the authority and see what they say

margot

Many thanks for your help

Mr. Incognito

No worries- if you need help to review the response PM Me

smeharg

Seed capital relief is only available for investment in a qualifying limited company. You get tax relief on the amount of money you invest in shares.

If the loan is taken out by the company it cannot then be used to issue shares to itself. Therefore, if you're using the proceeds of a loan to invest, the loan must be a personal loan.

One possibility may be to take the loan out in your own name, rather than through the company. The personal guarantee removes any benefit of limited liability that operating through the company would normally provide. Presumably, you'd have to go through the whole loan application process to do this which will take time you may not have.

You'd also have to weigh up the pros/cons of debt versus equity funding.

Bakemate

I'm also intersted in the Seed Capital Fund, but it looks like I've completely misunderstood it? It says you can claim back tax you've paid in the last 6 years as long as you invest it in shares in your company. So that's different than tax relief on money you've already invested surely, which is what previous post say?