Loan to US company

Discussion in 'Accounting & Tax' started by lettert, 27th Dec, 2019.

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  1. lettert

    lettert Well-Known Member

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    I know this will need more detailed discussion with US tax person, but quick question for US tax/finance experts on this forum -

    If I were to own a US-based company (LIC? possibly owned by trust but not sure) earning income from a well-known US company for services provided, could the company get US financing? If so, is there a minimum number of years income needing to be shown?
    Specifically the financing would be used to buy property in the US, but not sure if this needs to be stated. Currently the income goes into an Aussie company, so that would be restructured in anticipation of purchasing US property.

    Otherwise, I've been reading about loans to non-US property investors in another thread and will do more research on that.
     
  2. MTR

    MTR Well-Known Member

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    Not an expert and not sure exactly what your end goal is??

    However, foreigners can not source loans in US, not the conventional route, as you dont have a credit rating and foreigners are considered higher risk

    The avenue foreign investors are pursuing is equity loans, where you have US property and access equity, 65-70%

    There are generally costly set up fees and higher interest rates

    As far as setting up US company/LLC does not change the fact you are still a foreigner
     
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  3. lettert

    lettert Well-Known Member

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    Thanks @MTR thats exactly the kind of thing I was wondering. The reason is to get financing to buy more properties. Obviously that won’t work!

    I am considering buying some us properties later next year, can do cash but financing is always nice.
    If you don’t mind me asking, do you have a team in the us? We are planning to visit the us and see some places in person, but I hear rental management etc is difficult
     
  4. MTR

    MTR Well-Known Member

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    Good idea to fly over

    Where are you looking at buying ??
     
  5. lettert

    lettert Well-Known Member

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    Well... heading to bigger pockets to learn a bit more first... ideally rentals for yield (mainly) and hopefully cg down the line. So possibly southern states (still need to verify tax friendliness) maybe Detroit if it still looks promising and can find someone(s) to help? I hear some good things about Florida but haven’t researched yet

    Basically still in learning phase, trying to figure out who and what it takes and if we can do it or not.
     
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  6. MTR

    MTR Well-Known Member

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    Biggerpockets good start
     

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