The member trustees may use the funds within the SSAS to invest in their business through secured loans, known as a loanback.
Loans can be used to buy, for example, fixed assets, land for development or to increase stock.
The maximum amount that the trustees can lend is 50% of the net SSAS fund and repayments must be made in regular capital and interest instalments. The maximum term permitted for the loan is five years. Interest will be charged at a rate of at least 1% above the average base-lending rate of the six leading high street banks.
Such loans must be secured against assets by way of a first charge and the security must be sufficient to cover the loan and interest on it.
Our retained solicitor must be appointed to undertake all legal work for the loan including the security. This is to ensure that the trustees are not exposed to unacceptable risk, which can occur in the case of default on loan repayments if security is not put in place correctly.
It is not possible to make loans to the member trustees, or anyone connected to them. Furthermore new loans to unconnected parties are not permitted in the Rowanmoor SSAS.
For clarity, please note the following definitions: where we refer to Member Trustees, this means all those who are members of the SSAS who have been appointed as a Trustee.