Can a SSAS Make a Loan to the Business?
The answer is, Yes.
What is the Maximum a SSAS Can Lend?
The maximum that the SSAS can lend back to the sponsoring employer, which is the Limited Company that set up the SSAS, is 50% of the net scheme assets. The loan must be taken on a 5 year capital and interest basis.
The interest rate is usually set at 1% above the four main high street banks' base rate, so the cost of borrowing using this method should be lower than with high street banks that (at the time of publishing) are charging between 3% and 5% more than base rate.
One Crown Pensions Take Care of the Paperwork
At One Crown Pensions we have all the necessary forms and application forms to facilitate this process for you. It should be fairly quick.
You Must Have First Charge Security
To qualify for one of these loans back to the sponsoring employer you must have first charge security available on an asset that is acceptable to the pension scheme. If you’re unsure what asset might qualify, give one of the team members a call to discuss what assets are eligible as security.
This is another example as to how a One Crown Pensions SSAS can act as a quasi bank for your business.
