Mick had run his own engineering firm successfully for over 20 years. However, over the last two or three years business had been tight and his bank had been looking to review his overdraft facility. The business also needed to invest in some new capital equipment. Whilst the bank had agreed the finance, Mick considered that the conditions attached to the finance were onerous and the charges seemed excessive.

What we did

Over the good years, Mick had managed to extract profits efficiently from his business and had built up a significant pension fund investment portfolio which he was able to borrow against to make a pension loan to his company. This meant that he could reduce the company’s overdraft facility AND purchase the capital equipment needed, without having to tie him and the business into the onerous conditions and high fees proposed by his bank.

What we achieved

Since Mick didn’t have to encash any part of his portfolio, he avoided having to sell some assets at a depressed price and wasn’t forced to sell any of those which had performed well. The interest charged on the lending is now used to increase his pension value whilst still being treated as a business expense. This enables him to continue funding his own retirement and at the same time, support the growth of the business.