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Bernadette C.
Bernadette C.
Rosebery, NSW

Our business has been operating for 18 months and we need additional investment to grow. Instead of taking on new investors is it possible to set up our own SMSF to invest funds and have shares in the business?

8 years ago


Hi Bernadette
You would have to chat yo a SMSF professional such as a qualified accountant or financial planner about the rules of SMSF.
The other suggestion I have is that there are different companies that look at equity funding for the right businesses. The best thing is to have information pack or business plan prepared and i can present it to the right places on your behalf.
Kind regards Paul

Hi Bernadette,

Congratulations on your business’ growth over the past 18 months, you have hit a road block most businesses take a little longer to reach. Access to capital is one of the key hurdles businesses face in Australia, and with the banks unwilling to ‘come to the table’ for small business the funds sitting in your superannuation can look attractive.

Bernadette when looking to invest through your (potential) SMSF it is important to be mindful of the ‘in-house asset rules’ which limits any related-party investment to less than 5% of the fund’s total assets. The SMSF would also be unable to own more than 50% of the shares in the company, and the purpose behind the investment must not be to provide indirect financial assistance to the fund members (i.e. don’t lend/invest the money in the company and then give it to yourself)

Hopefully that helps Bernadette, please be aware that these are just some of the key areas to be aware of in this scenario and by no means cover all the moving parts when it comes to SMSF’s.

Bernadette I am more than happy to catch up for a face-to-face to discuss further and see if we can be of assistance, I would love to hear more about your business.

Kind Regards,
Ben Andrews
0415 222 137 | 02 9251 5558

Hi Bernadette,

I would like to add to Ben's comments in relation to in-house assets not being more than 5% of the SMSF's total asset value. The 5% rule not only applies to the initial acquisition of the related party investment but will needs to be less than 5% of the total fund value on an ongoing basis.

If you were to enter into this transaction, you will need to continually monitor the fund's total assets position to ensure you comply with the rules. If you exceed the 5% limit, you may be forced to add more funds to the SMSF or sell down your related party investments.

Hope this helps you with some of your decision making.

Kind Regards,
Tony Lu
0416 084 370 | 02 9251 5558

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