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How can a SSAS help your Company Cashflow?


A company owned by three family members wanted to raise some monies to provide cashflow to their business to allow it the opportunity to expand.

The issue

The company’s existing bankers were unwilling to provide the company with any further finance and therefore their plans to expand were unable to proceed.

The options

During a meeting with their financial adviser who was reviewing their existing pension provision, the adviser informed the family how they could use their pension funds to provide cashflow to the company, as the bank were willing to provide finance. This would allow the family to provide the funds to the company and achieve their expansion plans.

How could the family use their pension funds to assist the company?

The existing pension provision was currently held in old style insurance company contracts, which do not offer the same flexibility to the family. The total of their existing pension arrangements amounted to £380,000 between the three family members. Their adviser informed the family that they could set up a Small Self Administered Scheme (SSAS) and use the pension monies to provide cashflow to the company.

The company owned the business premises that it operated out from. The property was valued at £320,000 but was charged to the bank as security for the company overdraft facility. The facility in this scenario was £100,000.

The adviser in conjunction with discussions with the SSAS trustees, deemed that the company property was an appropriate pension scheme investment.

The adviser recommended to the family that they should set up a SSAS and transfer their existing pension plans into this new scheme.

How did establishing the SSAS assist the cashflow of the Company?

With the pension monies now held in the SSAS, totalling £380,000, the family in conjunction with their adviser and pension scheme trustee liaised with their existing bank to facilitate the purchase of the property from the company.

As the bank had a charge over the property the bank had to be comfortable with releasing the charge and allowing the pension fund to purchase the property whilst at the same time allowing the company to repay the current overdraft amount.


The Family Position
Before the transaction After the transaction
Pension Fund Assets – Cash £380,000 £80,000
Pension Fund Assets – Property £Nil £300,000
Total £380,000 £380,000


The Company Position
Before the transaction After the transaction
Property £300,000 £Nil
Cash at Bank £Nil £200,000
Bank Overdraft (£100,000) £Nil
Total £200,000 £200,000



The Outcome of the Transaction

The bank overdraft for the company was repaid whilst providing funds available for cashflow of £200,000 to allow the company to fund their expansion plans.

If you would like to know more about how a SSAS could work for your company or your clients then please contact Kerry Houghton via email or 01772 550614.


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