SSAS / SIPP Lending

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This style of lending creates an opportunity for a business to acquire a property within their business via their pension scheme to create a tax wrapper around the profits. SSAS lending will allow the purchase of property for its own use or for rental use.

Much like SSAS lending, SIPP's run on the same principles. The main difference relating to regulation. SIPPS have more regulatory control and as a result are more preferred by mortgage providers.

This type of structure separates the property asset from the trading business, effectively placing the property in a 'holding company'. So, the business remains the trading business, the propco then leases the property back to the opco (Operating business)

When a business is seeking a commercial mortgage to acquire a property for their own occupancy the finance provider will assess the EBITDA (Earnings before interest, taxes, depreciation and amortization). They want to make sure the business has enough profit, liquidity and security to fund the commercial mortgage.

The financial conduct authority does not regulate most forms of commercial mortgage.