Cash Release

vcator

I'm raising funds for a company acquisition and need to match private equity to get the deal across the line.

I have a dormant pension with a current transfer value of c.£30k

I'm 51 with investments in property and shares, but in terms of raising cash, both are in effect 'locked'.

£20k or more released from the pension would 'make a difference' in whether the deal happened.

Can anyone suggest how I might be able to do that ?

Any thoughts are very welcome

somethingcorporate

You cannot, it's for your retirement not a savings account you can dip in and out of at will.

You should be able to access 25% as a lump sum at 55.

Could you not re-mortgage one of your properties or sell some shares?

atush

I am not sure, but could a SIPP help? I nkow they can hold commercial property but don't knwo if they can own 'shares' in a private business?

I agree that a property sale or remortgage or disposal of shares will be the way to go. I know someone in your situation who did end up selling a rental porperty to take part in his MBO.

CannySaver_2

Hi

I don't think a SIPP could be used because there is rule which prevents it from buying shares or lending money to a connected party, which is clearly the case here.

A SSAS has no connected party rule, however for it to lend money to a business it has to take a first charge on an asset, this could be commercial property, stock, plant etc.

A remortgage of an existing asset would be easier, or perhaps approach a friend, family member of indeed a bank. £20k is in the region where the bank may consider lending without security.

The Canny Saver

CannySaver_2

somethingcorporate wrote: »

You cannot, it's for your retirement not a savings account you can dip in and out of at will.

Unlike other posters on this topic I'm not sure that the OP wants to "dip into his pension" any use of the funds to help finance a business is a perfectly legitimate use of a pension's assets, after all it's an investment with a return attached to it. If the money is used to buy shares the plan would be for these shares to go up in value, if it is in the form of a loan then it should be repaid at a commercial rate of interest.

I think this case is different to others seen recently on this board.

The Canny Saver

vcator

Thanks for the comment.

The shares I own are held in a previous company I founded and are probably worth c.£250,000. However, Private Equity investors have pre-emption rights and legally I cannot sell the shares until they have taken their return. PE have been in for 7 years, so I've every reason to expect they are getting itchy feet to exit . . but nothing definite as yet.

I've been working on the acquisition of a medical business - the strategy is to buy a stable business into which we'll put some IP (innovative new products). The business we are trying to buy have a track-record of profitability, growing >70%pa, GM north of 80% with the NHS as the customer. After 12 months of of incredibly hard work trudging around the PE houses, we finally got offers from 2 funds.
[2 of the 4 banks we approached wouldn't factor NHS invoices !].
Throughout that time I've had no income, living off of savings, so there's no chance of getting a mortgage in the current climate.

Hence I'm looking at an orphan pension and thinking it would be mighty useful to cash-in right now

westy22

You could consider taking a loan from Funding Circle http://www.fundingcircle.co.uk. They lend up to £75,000 to established, creditworthy businesses. We took a loan from them to buy some new vehicles and the whole process from application to receiving the funding took about 3 weeks. We managed to raise funds at an interest rate below 7% pa which was far cheaper than our bank offered!