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Loan for a holding company?

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I produce cheese. I have a holding company which owns 100% stake in an operating/trading/manufacturing company. If we need to fund for example purchase of expensive machinery, how would you go about getting finance from a bank for the holding company if all the revenue is being generated by the operating business? Shall we aim to proceed all earnings from the operating company to the holding company which will fingers crossed entitle the holding company to secure a bank loan?

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By JessicaRain
31st Jan 2019 21:51

As a matter of interest, why isn't the 'operating' business applying for the loan?

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By MortenC
31st Jan 2019 22:36

Ideally it should, but one of the main objectives of holding/operating company structure is to protect assets. In food manufacture, machinery and other factory equipment are some the most important assets, so I believe it makes sense if they're owned by the holding co. Does it make sense?

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Replying to MortenC:
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By Wanderer
01st Feb 2019 04:44

MortenC wrote:

Does it make sense?


Not really, see your other thread on much the same subject:-
https://www.accountingweb.co.uk/any-answers/protecting-stock-through-a-h...

You are already trying to separate two intertwined issues without giving the full facts together.

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