Hi. I hope this is in the right forum. Apologies, this is a long query.
I have two mainly service businesses operating from different premises and pay total rent to the landlords of €1400 per month excluding rates and insurance. One business has been running and paying rent for just over five years. The other has only started this year but looks to be viable. I have a limited company and a sole tradership plus other third party income not shown below.
I always hoped to eventually buy a commercial premises and have come across one with retail space downstairs which can accomodate both businesses and residential space upstairs. I would hope to get it for around 120k.
The issue is convincing the bank of the advantages. I know I personally would be a lot better off financially by buying this premises. However between my own home mortgage(75K) and being guarantor on a relatives mortgage(200K), I am covering on paper close to three hundred thousand in loans. The guaranteed property will be sold to another relative within a year or two max. I hope to clear my own home mortgage within a maximum of five years based on my current position.
I don't work full time in the businesses and only take a modest income from them.
I have worked out the following calculations:
Company income 100,000
Overheads(Wages etc) 36,628
Rent 16,800
Rates & Insurance 4,708
Director Salary 20,800
Profit 21,064
Tax @12.5% 2,633
Personal annual income based on buying the new premises would be:
Director Salary 20,800
Rental Income Office/Shop 16,800
Rental Income Residential 15,600
Total 53,200
Loan interest 75% 2250
Taxable Income 50,950
Tax @ 20% 10,190
Income after tax 40,760
Less loan repayments 14,400 over ten years.
Net personal Income 28,610
My questions are:
1. Do my figures look reasonable. I have used the 20% tax rate for simplicity and ignored tax credits etc. Am i forgetting anything?
2. What are my chances of convincing a bank to loan me the money. My own bank and business bank are not currently giving commercial loans?
I'm 43 in case that is relevant and my husband is 44. His income is not part of the calculation. I've around 70K equity in my home and around €20k towards the deposit.
Any advice welcome. Apologies for the long post.
Thanks
I have two mainly service businesses operating from different premises and pay total rent to the landlords of €1400 per month excluding rates and insurance. One business has been running and paying rent for just over five years. The other has only started this year but looks to be viable. I have a limited company and a sole tradership plus other third party income not shown below.
I always hoped to eventually buy a commercial premises and have come across one with retail space downstairs which can accomodate both businesses and residential space upstairs. I would hope to get it for around 120k.
The issue is convincing the bank of the advantages. I know I personally would be a lot better off financially by buying this premises. However between my own home mortgage(75K) and being guarantor on a relatives mortgage(200K), I am covering on paper close to three hundred thousand in loans. The guaranteed property will be sold to another relative within a year or two max. I hope to clear my own home mortgage within a maximum of five years based on my current position.
I don't work full time in the businesses and only take a modest income from them.
I have worked out the following calculations:
Company income 100,000
Overheads(Wages etc) 36,628
Rent 16,800
Rates & Insurance 4,708
Director Salary 20,800
Profit 21,064
Tax @12.5% 2,633
Personal annual income based on buying the new premises would be:
Director Salary 20,800
Rental Income Office/Shop 16,800
Rental Income Residential 15,600
Total 53,200
Loan interest 75% 2250
Taxable Income 50,950
Tax @ 20% 10,190
Income after tax 40,760
Less loan repayments 14,400 over ten years.
Net personal Income 28,610
My questions are:
1. Do my figures look reasonable. I have used the 20% tax rate for simplicity and ignored tax credits etc. Am i forgetting anything?
2. What are my chances of convincing a bank to loan me the money. My own bank and business bank are not currently giving commercial loans?
I'm 43 in case that is relevant and my husband is 44. His income is not part of the calculation. I've around 70K equity in my home and around €20k towards the deposit.
Any advice welcome. Apologies for the long post.
Thanks
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