At the risk of sounding stupid.... a question about purchasing at auction.

[Bryony M]

Hello! 

So I am now just setting up my limited company. I will be having cash hit my bank within the next week or two. There is a property that I would like to bid on at auction later this month. However, my business banking account will not be set up in time. Am I able to potentially bid through my limited company but pay through my personal banking account? I am speaking with an accountant next week and can speak with a solicitor next week but wondered if anyone on here knows so that I do not spend the whole weekend wondering.

It's probably a silly question but I am new to all this! 

Many thanks! 

Bryony 

[Guest]

Hi Bryony,

I assume that you will be purchasing the property in cash? If so, the cash can be paid from your personal account, even if the purchase is made in the name of your company. In your accounts, it would be classified as a simultaneous directors loan into the business and payment out to acquire the asset. This is the same as anything that you buy for the company - you can purchase it personally and then expense it back to the company later.

However, if you were using a mortgage (I assume not if its an auction purchase), the lender may require your company bank account to be open before proceeding, as that's where your interest repayments would come from. If you are using a mortgage (or bridging loan) then it would be best to ask your broker.

Chris (www.fintentional.co.uk)