How to pay for growing the business
Five ways to find the money, with the cost after tax for you and the company together, plus what each means for control and risk.
Your answer
Enter how much the company needs and your income to compare the five ways of paying for it.
About this calculator
For owners of a limited company weighing up how to pay for growth: from profits the company already has, a bank loan, lending it the money yourself, putting it in as new shares, or selling a share to investors. It shows the cost after tax for you and the company together, and what each route means for control and risk.
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How it’s worked out
A bank loan: we work out the interest on equal monthly repayments, less Corporation Tax relief at your company's rate. The repayments themselves get no relief.
Lending it yourself: the company pays you interest and gets the same relief; you pay income tax on the interest at savings rates (after any tax-free interest), and get the money back tax-free at the end. The company takes 20% off each payment and pays it to HMRC (form CT61). New shares: no interest, but to take the money back as dividends you pay dividend tax, which we work out on equal dividends over the years. Investors: their share of what the company will be worth, less what they pay.
Using profits costs nothing extra, but you go without the dividend now. We don't count what the money could earn elsewhere, and later years use today's tax rates, with the announced rise in savings rates from April 2027.
Worked example
On these figures, lending it yourself comes out best: after tax, you and the company end up £1,693 better off over 5 years.
£50,000 over 5 years · bank 8% · your loan 5% · your income £40,000 · company profits between £50,000 and £250,000 · investors 20%
| The company needs | £50,000 |
|---|---|
| 1. Using the company's profits: nothing to pay | £0 |
| The dividend you go without now | £50,000 |
| The tax you'd pay on it now, on top of your £40,000 income (put off, not saved) | £15,254 |
| 2. A bank loan: 8% over 5 years, £1,014 a month | £60,829 |
| Interest paid (the repayments less the £50,000 borrowed) | £10,829 |
| Less 26.5% Corporation Tax relief (profits between £50,000 and £250,000) on the interest. The repayments get none | − £2,870 |
| Cost to the company after tax | £7,959 |
| 3. Lending it yourself: 5% interest a year for 5 years, the £50,000 back at the end | £12,500 |
| Less 26.5% Corporation Tax relief (profits between £50,000 and £250,000) on the interest | − £3,313 |
| Cost to the company after tax | £9,188 |
| Each year the company takes 20% off the £2,500 interest and pays it to HMRC (form CT61): you get £2,000 | £500 |
| Your tax on 2026/27's interest (savings rates 20%, 40% and 45%, after any tax-free interest) | £300 |
| Your tax on 2027/28's interest (savings rates 22%, 42% and 47%, after any tax-free interest) | £330 |
| Your tax on 2028/29's interest (savings rates 22%, 42% and 47%, after any tax-free interest) | £330 |
| Your tax on 2029/30's interest (savings rates 22%, 42% and 47%, after any tax-free interest) | £330 |
| Your tax on 2030/31's interest (savings rates 22%, 42% and 47%, after any tax-free interest) | £330 |
| What you keep: the interest less your tax (it counts against the company's cost) | £10,880 |
| 4. Putting it in as shares: nothing to pay while it's in | £0 |
| Tax to take it back as dividends of £10,000 a year for 5 years, on top of your income | £5,106 |
| 5. Selling shares to investors: the company's value, 4× a year's profit of £60,000 plus the £50,000 raised (our rough starting point, no growth) | £290,000 |
| Their 20% of it | £58,000 |
| Less the money they put in, which is never repaid | − £50,000 |
| Value you give away | £8,000 |
| Their price values the whole company at £50,000 ÷ 20% | £250,000 |
| Total for you and the company: lending it yourself | − £1,693 |
| Total for you and the company: using the company's profits | £0 |
| Total for you and the company: putting it in as shares | £5,106 |
| Total for you and the company: a bank loan | £7,959 |
| Total for you and the company: selling shares to investors | £8,000 |
| Control and risk, using the company's profits: You keep full control and owe nobody, but the company has less cash to fall back on. | |
| Control and risk, a bank loan: You keep all the shares, but the company must make the £1,014 monthly repayments whatever happens, and lenders often ask for a personal guarantee or security. | |
| Control and risk, lending it yourself: You keep control and can take the money back without tax, but your own savings are at risk if the business fails: you'd be one of its creditors. | |
| Control and risk, putting it in as shares: Nothing to repay and you keep control, but the money is locked in: it only comes back as taxed dividends or when you sell. | |
| Control and risk, selling shares to investors: Nothing to repay, and investors share the risk, but you give up 20% of the company for good: its profits, its sale price and a say in decisions. |
Worked out using the 2026/27 Corporation Tax, dividend and savings rates, held for later years, and HMRC's rules on interest you lend your company.
Questions people ask
Why can lending to my own company come out ahead?
The interest is a cost for the company, so it saves Corporation Tax, and it's income for you. If your tax on it is less than the company saves, for example because some of it is tax-free interest, you and the company together are better off. The rate should be a fair commercial one.
Can I get SEIS or EIS relief on money I put into my own company?
Usually not. The relief is for outside investors: you can't claim if you and your associates (such as close family) hold more than 30% of the company or are employed by it. Investors can get 50% (SEIS) or 30% (EIS) income tax relief if the company and the shares qualify, which can make your shares easier to sell.
Which should I choose?
We can't advise on borrowing or recommend a lender. The calculator shows the tax cost of each route; the right one also depends on how much risk you want to take on, whether you want to keep full control, and what the company can afford to repay.
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