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Business loan vs personal loan vs cash

FP
13/11/2023
Question

Hi,

To start my activities as a freelancer (as a secondary occupation), I need to make purchases of a laptop and a mobile phone. I was given advice to apply for a business loan for this, as it would be more advantageous (and it is also more financially comfortable to borrow this amount). However, KBC’s proposal is not that good: 5.3% interest, 125 euro in administrative costs, 22 euro in management fees per quarter and 15% own contribution in addition to vAT. This brings me to +435 euro on an amount of 2212 euro. To make a comparison: on a personal loan for the same amount, I would only pay 187 euro extra.

Can someone give me an explanation as to whether it is still more interesting to take out a business loan?

Thanks for your help!

Kind regards,

Femke

No, it's no longer more attractive...

You contribute the capital from the loan based on the purchase. That purchase is an investment > you depreciate it, and those depreciations are entered in the accounts.

You enter the interest on the loan based on the loan. But it doesn't matter whether it's a personal loan or a business loan in a sole proprietor. (Important, in a sole proprietor!).

So there's no difference, choose whatever is cheapest. Unless there's some small print somewhere that makes a difference, but no difference for tax purposes.

Above that, it is not necessarily cheaper to borrow. If you have that amount state, I would just pay it. Otherwise, you will also have to pay interest.

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You really should try it out for yourself. Even if you don’t have a company number yet, you can already go ahead.

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