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Matt S.
Matt S.
Manly, NSW

My business has been operating for 10 months and we have just secured a couple of new contracts which means I need 2 new staff. As the business has just started to grow I am finding it difficult to get the finance needed to take advantage of the new contracts. Is it possible for me to invest some of my super into the business? I have $220,000 in super and only need about $40,000

2 years ago


a really big no no that the ATO will make you regret.
The only way to get your hands on super to satisfy a condition of release: ie retire or die.
lending money from the fund to a member is the most common contravention and the ATO takes a very dim view of this, and the penalties can be as high as 47% tax on the fund earnings AND 47% tax on the fund ASSETS!!!
so your short term loan could cost you over $100k
So whilst it is massively frustrating to sit there watching potential business growth evaporate for the want of some seed capital, super is not the answer.
Talk to a broker about what you CAN do that wont give rise to a massive tax bill. There ARE options out there, however the further away from the big FOUR lenders you get, the more expensive the funding becomes.....and there is a point where the cost of capital is simply too high.
good luck

Hi Matt,
Congratulations on the new business, great to hear it is growing. I don’t believe that you can use funds from your Super, whether it is self managed or not. You could potentially purchase commercial premises and your company could rent the space but I think that is the only option. I am sure some of the accountants on here will clarify.
A separate question - if you have secured contracts and have priced in a profit margin why do you need to borrow money? Are the contracts back-ended such that they won’t pay until after all of the work is completed?
Is it possible to have a progress payments option so that the client pays a deposit and you aren’t funding the customer along the way?
I hope you find what you need and can concentrate on growing and building your business
Best of luck

Hi Matt,

BC is right - there are very clear rules with Super that say No to usiong those funds for the member or their affiliates (including related business).

PLEASE speak to your business finance broker and accountant, get interim accounts prepared, budget for the upcoming year with the growth and additional costs associated (to make sure this is financially worthwhile) and update/prepare a business plan. Getting finance for the business, when so young, can be difficult. Hopefully these details with a good broker will see some success (may need to use equity in your home if available).

Good luck

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