Our client wanted to expand
The opportunity arose for our client to acquire and develop a plot of land adjacent to their business premises. This coincided with an ambition to purchase an expensive item of machinery to assist in the Company’s ambitions to expand. The Company had insufficient funds to do both, but they did have a SSAS.
All options for funding the property purchase were considered. The bank showed interest – but held reservations over the site’s value. The Directors decided that the Company’s overriding interest in site acquisition and the purchase of new machinery must rule the day. It was therefore decided that the trustees of the SSAS would make a loan to the Company to fund the machinery purchase, secure the loan by means of a “chattel mortgage” (backed up by adequate valuation) and so permit the capital remaining in the Company to be used for the site acquisition.
An excellent final outcome
The outcome was for sensible usage of SSAS funds, a commercial rate of interest upon the monies lent, the easing of the Company’s capital position and the acquisition of the property.
