total money

Having been unemployed for a considerable period of time i have decided that i my have to buy myself a job by purchasing a small business.
With money in the bank i was thinking of borrowing money using the BNZs total money.
The amount that i borrowed would be less than what i have in the bank so am i correct in thinking that no interest would be paid? With returns on my money at an all time low with the bank this appears to make sense to me.
With a freehold home i would use that as security.
Pitfalls anybody?

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Originally Posted by beetills

Having been unemployed for a considerable period of time i have decided that i my have to buy myself a job by purchasing a small business.
With money in the bank i was thinking of borrowing money using the BNZs total money.
The amount that i borrowed would be less than what i have in the bank so am i correct in thinking that no interest would be paid? With returns on my money at an all time low with the bank this appears to make sense to me.
With a freehold home i would use that as security.
Pitfalls anybody?

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You probably mean your home is unencumbered, or mortgage free. Freehold refers to tenure and almost all NZ homes are freehold but often with a mortgage. A minority are leasehold. You might want to look at the costs of raising the mortgage they will require as security. Why not use your own dough and raise a mortgage only when and/or if you have to?

Firstly:Do you really need it?Have you not enjoyed being tied to a full time job?Have you eaten in to your savings? Other options?
Then,I would use a revolving credit facility secured over your home.That way interest is tax deductible and it can be paid off as much as you can when you can or draw it back out.The interest rate can be fixed for a period if you can foresee it not being paid back for a period of time.
Serious pitfalls? Loosing your home if business goes bad!
Good luck!

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Originally Posted by kiora

Firstly:Do you really need it?Have you not enjoyed being tied to a full time job?Have you eaten in to your savings? Other options?
Then,I would use a revolving credit facility secured over your home.That way interest is tax deductible and it can be paid off as much as you can when you can or draw it back out.The interest rate can be fixed for a period if you can foresee it not being paid back for a period of time.
Serious pitfalls? Loosing your home if business goes bad!
Good luck!

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The deductibility doesn't revolve. If you pay some back then draw down again it will no longer be deductible. To meet criteria for deductibilty the loan must be to potentially further taxable income.