Should I use company account money to repay housing loan?

by kimora lee
(malaysia )

I am a music teacher and recently registered a company. It is a sole proprietorship company. It's solely owned by me. My question is besides using the company money to pay any expenses due to business, can I use the company to repay my housing loan?My housing loan account is very flexible. I can withdraw the money at anytime if I want. I thought instead of parking my money at the company account which doesn't generate any interest,I thought I can save some interests from my housing loan account. What do you think?


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Hi Kimora!

You need to keep your business money and your personal money separate.

It is possible to take a personal "draw" from the business, and do with it what you wish, but it should be recorded as a decrease in Owners Equity.

If you want to earn interest on your business funds, think about opening a savings account in the business name, and parking some funds there to earn you some interest.

Otherwise, you'll have to withdraw some Owners Equity to take money out of the business.

Hope that helps!

Kathy

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