Which Commercial Finane News Archive

SIPP pensions are becoming an increasingly popular type of pension. The low cost of SIPP pensions and their flexibility of investment choice, mean that pension savers are able to tailor SIPP pensions to their own particular needs.

Whilst low cost SIPP pensions are attractive to individual pension savers, they can be limited by the scope of investment flexibility a SIPP pension provider allows. SIPP pensions for businesses and the self employed have until now had much higher SIPP provider costs, in the main due to the nature of investments that can interact with a business. They are typically unique investments to an individual SIPP pension, as opposed to a 3rd party market based transaction of a standard SIPP Pension.

These investment choices include:

• Intellectual Property Purchase (i.e. TM, domain name and patents)
• Commercial Property Purchase
• Share Purchase

The changing SIPP pensions market has seen some providers charge no set up fee, along with annual fees of £350 or less for the administration of the SIPP pension. This makes a SIPP pension a very attractive vehicle to utilise within a business and for pension planning. There will be associated costs such as advisory, legal and valuation fees with these SIPP pension investments, however, these fees will typically reflect the cost of the same investment outside of a SIPP pension.

This use of SIPP pensions can be extremely advantages to businesses as the SIPP pension can facilitate a cash injection into a business, reducing the reliance upon 3rd party business funding. It may also be possible to syndicate a SIPP pension to enable 2 or more individual SIPP pensions to invest in a business asset. Using SIPP pensions in this way also places greater emphasis on pensions for the SIPP pension member. This can have a positive long term effect on pension saving and aid diversification in retirement planning.

For information and advice regarding SIPP pensions, please contact us.

For sole traders and business owners, retirement and pension schemes may not be as important as the success of their business. However, retirement and pension schemes are a vital part of planning an exit strategy and without advance retirement and pension scheme planning, time can be a major constraint. Many entrepreneurs do not plan for retirement using pension schemes, recent reports have suggested that 60% of Britain’s self employed do not save for retirement in pension schemes. Many entrepreneurs believe their business is their pension and key to their retirement, they therefore concentrate their investments within their businesses to build value. This can prove a very risky strategy as the future value of any business is very difficult to estimate.

Many entrepreneurs face these dilemmas as they have not diversified their wealth accordingly. Domestic Property and Business Equity are commonly the two major assets of entrepreneurs. Pension schemes are not valued by the individual and are typically from previous employment, they cannot afford to be locking away funds for retirement in pension schemes when they could invest in their business.

Retirement and pension schemes need to be given careful consideration by entrepreneurs. Pension schemes as part a diverse portfolio will be beneficial in retirement. The risk many owner directors face before retirement is that their health brings forward their retirement or, they cannot extract the value they need from their business to provide their desired standard of living in retirement.

The implications for entrepreneurs are a longer working life or lower standard of living in retirement if the value of their business or health issues detrimentally influences their retirement.

The obvious answer to reduce this risk of this situation occurring in retirement is to invest in a pension scheme. The good news for entrepreneurs is that pension schemes do not have to lock money away until retirement. There are pension schemes such a Self Invested Personal Pensions (SIPP) and Small Self Administered Schemes that can interact with businesses on a commercial level. Advantages of these pension schemes are:

• Commercial Loans
• Commercial Property Purchases
• Intellectual Property Purchases (TM, domain names, patents)
• Tax Efficient Saving

Utilising pension schemes to interact with a business can negate the need for third party business finance, potentially leading to financial independence. It may also be cost effective to finance a business in this way, as the costs associated with pension driven business funding can be lower than traditional 3rd party finance.

For information and advice regarding retirement, pensions and pension driven business funding, please contact us.

Directors’ Pensions are often overlooked, the requirement to maintain funding within their businesses for cash flow and investment purposes, results in directors’ pensions being a neglected part of their retirement portfolio. Many directors’ pensions will be the value built up in their business, either the sale proceeds or dividends in retirement. However, recent times have shown that business owners relying upon their businesses as their directors pension is a high risk strategy.

Business owners do appreciate that developing a diverse retirement portfolio comprising of a directors pension, personal savings, property and business equity will reduce the risk of a reduction in living standards in retirement and forgo the need to carry on working. To address this, many business owners are investing in and utilising their directors’ pensions within their businesses. Specialist directors’ pension funds in the form of Small Self Administered Schemes (SSAS) and Self Invested Personal Pensions (SIPP) can interact with businesses on a commercial basis. These directors’ pensions can facilitate:

• Commercial Loans (SSAS)
• Commercial Property Purchases
• Intellectual Property Purchases (Trademarks, domain names and patents)
• Share Purchases (SIPP)

By utilising a director’s pension in this way, the director’s pension is actively managed and the invested in the personal investment interests of the business owner. For the right business and business owner, this form of director’s pension investment can provide financial independence to their business whilst actively managing the growth of their director’s pension, contributing to a diverse retirement portfolio.

For more information regarding directors’ pensions and specialist SSAS and SIPP advice, please contact us.

Pension funding is an important part of a retirement portfolio. Many people will have property and personal savings to rely upon as they try to maintain their standard of living during the transition into and throughout retirement. Business owners will also have the value they have built in their businesses to supplement their pension funding.

Pension funding can be complicated for many business owners as pension legislation is continually evolving and business needs take priority. This for many business owners can detract from the need for pension funding, leaving many business owners pension funding far short of the levels necessary to maintain their standard of living in retirement.

For business owners, there are pension funding opportunities that with the correct long term advice can provide pension funding opportunities able to interact with their businesses. These pension funding investments include:

• Business loans
• Commercial property purchases
• Intellectual property purchases (ie – Trademarks, domain names and patents)
• Share purchases

This sophisticated pension funding advice for business owners has proved invaluable to many business owners throughout the banking crisis and recession. The opportunity to interact pension funding with their businesses has enabled business owners to maintain cash flow and working capital facilities, at a time when many banks and third party financiers are unable to help.

The utilisation of pension funding as a business funding mechanism can have a positive impact on long term pension funding, with the aim of achieving the required level of pension funding at retirement to meet retirement needs.

For more information and pension funding advice for business owners, please contact us.

Many businesses need a business loan, the reason they may need a business loan will differ, but invariably all businesses need a business loan to secure long term stability and success. In the current economic climate businesses that need a business loan are finding it increasingly difficult to obtain a business loan. Reports also suggest those who need a business loan will find it increasingly difficult going forward as money supply is likely to reduce and the banks are tightening their credit criteria.

There are however alternatives for business that need a business loan, one option is the utilisation pension schemes in the form of a SSAS (Small Self Administered Scheme) or SIPP (Self Invested Personal Pension). Both of these pensions can help business owners that need a business loan through their investment choices, these include:

• Business Loan (SSAS)
• Commercial Property Purchase
• Intellectual Property Purchase
• Company Share Purchase

All investment must be deemed suitable and comply with either HMRC or Financial Services Authority regulated legislation. For the right business that needs a business loan, a pension driven business funding strategy could meet the need for a business loan and potentially remove the need for third party financiers.

For more information and advice on the ability of a pension scheme interacting with your business, please contact us.

For most entrepreneurs, a business bank is a necessary requirement to manage transactions. Many entrepreneurs will rely upon their business bank to provide further business funding services including:

• Business Bank Overdrafts
• Business Bank Loans
• Business Bank Invoicing/Factoring
• Business Bank Insurances

During periods of strong economic activity throughout the last decade, business banks were able to adequately provide these facilities to businesses, making the business bank the only provider for many. As the banking crisis took hold and the recession deepened, business banks have become less willing to provide business bank facilities to businesses that have relied upon their support and require ongoing assistance.

Basel lll, the requirement for banks to increase their capital adequacy has had a negative effect upon the ability of business banks to provide facilities, as the banks have to set money aside. It could be argued that the effect of this can be seen in the banks not meeting the lending objectives set out in the Governments Project Merlin, new lending fell short by £25m per day in the first quarter of the 2011.

With business bank facilities not meeting the borrowing requirements of business customers, owner directors are struggling to finance growth. More importantly, many are struggling with the cash flow implications of inflation.

A business bank is not however the only option for business finance. With the right advice and structure to suit the individual business, alternative funding mechanisms can be successfully implemented, potentially removing the need for business bank borrowing facilities. These mechanisms may include:

• Grants
• Venture Capital
• Pension Driven Business Funding

For information and advice regarding business bank facilities and the alternatives, please contact us.

When researching how to finance your business, the traditional mechanisms and mechanisms you may have previously utilised to finance your business will probably feature highly in your findings. These mechanisms to finance your business are likely to include:

• Business overdrafts
• Business Loans
• Invoicing/Factoring
• Asset Finance
• Directors Loan Accounts

To finance your business utilising these facilities in current economic climate has become increasingly difficult. Third party providers are tightening their credit criteria and increasing their requirements for business and personal assets to back funding, whilst the availability of personal funds to provide directors loans has diminished for many entrepreneurs.

There are alternative methods to finance your business, each of the following mechanisms are very different ways to finance your business and will have their own implications. You may choose to finance your business through:

• Grants
• Venture Capital
• Pension Driven Business Funding

Diversifying the mechanisms utilised to finance your business could reduce the risk associated with one mechanism being altered by a third party financier. It may also open up the availability of working capital as more channels are available finance your business.

If you would like help or advice on any or all of the above ways to finance your business, please contact us.

How to finance a business is an age old question and one which may determine the success or failure of a venture. When determining how to finance a business, entrepreneurs will typically rely upon key funding mechanisms to finance a business. These will include business funding mechanisms such as:

• Business overdrafts
• Business Loans
• Invoicing/Factoring
• Asset Finance
• Directors Loan Accounts

In the current economic climate, how to finance a business has become an even more poignant question as these traditional methods of funding become more difficult obtain and even maintain. There are further answers to the question how to finance a business? Owner directors who are able can also utilise:

• Grants
• Venture Capital
• Pension Driven Business Funding

Ideally, owner directors will seek the most flexible, efficient and cost effective methods of business funding to answer the question how to finance a business? This will inevitably involve a mixture of business funding sources and involve advice and guidance on the most suitable mechanisms.

If you would like help or advice on any or all of the above mechanisms to finance a business, please contact us.

Funding a new business is a difficult task; many avenues of funding involve a greater investment of time and often do not provide the desired outcome. Most entrepreneurs first port of call when funding a new business is their bank, in the current economic climate, it is very difficult to obtain banking facilities without providing substantial security either through the business or personally and a proven trading history.

This leads many entrepreneurs to begin funding a new business through personal funds. This can have a major effect on personal finances as savings are depleted and purchases put on hold. In some instances, businesses may not start if personal funds are not available.

For entrepreneurs wishing to maintain financial independence, or, not able to obtain third party finance, it may be possible to finance a new business through the use of alternative personal investments. Many entrepreneurs use pension funds to invest in strong business plans, providing the required business funding and an alternative investment for existing pension funds.

For more information and advice on funding a new business through the use of pension funds, please contact us.

Obtaining the right small business funding is essential for any business. Investment for the future and managing cash flow requires adequate small business funding facilities to be made available by the banks and other third party financiers. Without the right small business funding solutions, businesses find it difficult to plan ahead and even deal with daily cashflow considerations.

In the current climate, small business funding has been difficult for many businesses to secure. Even maintaining existing small business funding facilities can be difficult as the banks credit assessments have become much tighter in light of the global economic situation.

Many business owners are looking for alternative forms of finance to traditional small business funding in order to provide stability in uncertain times and there are options available to them. One alternative small business funding mechanism is through ‘pension driven business funding’. For the right business, utilising existing pension funds to provide small business funding can achieve independence from traditional lending routes and provide a more active approach to pension investment.

For information and advice on small business funding strategies, please contact us.