Using PPOR loan split for business loan (sole trader)

So I have a PPOR with the loan split into 5 parts. Some of these are small 50k splits I had set up to use for granny flats initially on some IP's but haven't gone down that path just yet. My question is can I use one of the splits for my own business (sole trader not a company)?

Intention is to pay down the loan split, redraw funds into business account. Loan interest then becomes tax deductible as business expense?

If this is done do I need a separate business account for loan funds so as not to mix with the other business money? Then just use that acc for purchases only, machinery/parts etc?

Just trying to get an idea of strategy for debt recycling and reducing bad debt. Hoping this can be a better way than just using savings from the offset acc for business purchases. I found a few posts on lending the funds to a company and writing up a loan agreement, but wasn't sure if this is different for a sole trader. Thanks for your answers.

 

redrawing into a business account won't create any deductions.
You will still need to do something with the money and you will need to avoid mixing.

You can certainly do this as part of a debt recycling strategy. Get some tax advice on borrowing to pay tax and gst.

 

So the interest won't become a deductible expense for the business like it would be if funds were drawn for an IP?

 

It could be. But you can't just borrow and chuck some funds into a savings account. it has to be necessarily incurred in producing an income.