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Can I Use My Super To Buy A Business?

The term ‘Super’ here refers to one’s superannuation – the total savings one has accumulated throughout their working lives. Super can be used as a source of investment, and these investment opportunities include investments into property, banks or even to buy a business. These ‘super investments’ ultimately aim to obtain additional returns based off the amount saved. But here, the question arises of buying an existing business, to which the answer lies below:

  • Can I use my super to buy a business?

Yes, an individual can use their superannuation funds to buy a business and gain additional returns through running business operations. Research reads that for women over the age of sixty-five years old, almost 65% of them use their super funds to invest and use the remaining funds to pursue their passions and to run the household.

Hence, it is possible for a retiree to buy a business using their super funds, whilst also enjoying what they are passionate about at the same time.


  • What is the SMSF?

SMSF stands for the self-managed super fund. To put it into perspective, consider a common situation many business owners find themselves in. They must either choose to lease space for their business to perate in or purchase property and be the sole owners of it.

If the super funds is inadequate, getting a loan from a bank or financial organization is possible even with low documentation.

As a guideline, using SMSF to purchase commercial space for the business should come with a cash deposit of 35-40% above the price of purchase of the commercial space. Further, a particular lease termed as market lease shall be paid on a commercial basis, if the particular space is leased from a third party.

Hence, having a SMSF in terms of running a business is more beneficial than leasing out yet another property.


  • How much can I borrow?

Banks come into the picture when borrowing enters the stage. The banks will evaluate the credibility of the business, the sale forecasts, the business structure, forecasts, the turnover, profits and look at other detail. To draw a healthy and steady borrowing for the business, the balance sheet, cash flow statements, profit and loss statements, and the individual’s documents stating prior experience of running a business, must also be presented to the banker.

Only after the banks approve that the documents provided by the business and proprietor is sound do they proceed in distributing the loan. As a general rule of thumb, sixty percent of the value of the business is the maximum that banks are willing to disburse. For additional borrowing, private finance organisations can provide extra funding, but could come with higher rates of interests.

Mortgaging one’s commercial or residential properties can also be a part of borrowing if the above two options still do not provide sufficient funds.

Unsecured loans, are another alternative that has only recently been introduced in Australia. Generally it provides funding at a higher rate of interest than the banks.


  • What kind of business can I invest in?

The Australian economy provides a special business visa to nationals who do not belong to the country but are willing to do trade and business within the continent.

A sectoral research shows that the following sectors can be profitable enough for investment in the country:

  1. The country’s gross development majorly comprises of the service sector, hence, telecom, textile, property rental sites, etc. can become a profitable business proposition for the businessman entering into the market for making a profit.
  2. A small portion of the GDP also contribute to mining, hence, a business into trading of oil and gas from the Australian reserves can also turn profitable subject to an allowance from the Australian government.
  3. Travel and tourism promoting the national parks and conservation areas can also form a very profitable proposition for an entrepreneur to invest in the economy.
  4. Cafés and restaurant promoting various cuisines can also prove to be profitable for investment as languages such a Mandarin, Italian, Arabic, Greek and several are spoken in the continent. Along with this catering also is a wide area which can turn profitable for a certain sort of cuisine.
  5. Apart from these, online businesses can also be run in the continent with a small capital intake.
  6. Shops and stores providing groceries, antiques, gifts or any other handmade items can also prove profitable in the market, provided the competition available in the certain locality, one thinks of starting it in.
  7. Education and tutoring are yet one more option to explore as education becomes prime when it comes to a particular economy and its development, tutoring centres or an agency providing home tutors as well as online learning can become profitable.

Several other options may include event planning, digital media houses, and livestock farming.

If none of the above options are suitable for you, you can always apply for a start up business loans from Max Funding. We provide easy eligible business loans for you to start your own business. Apply now and get decision in 5 minutes.

Finance Expert, Writer, Entrepreneur

Tammy Richards is a passionate finance expert who is also a writer and business owner. With over 10 years of experience as a finance expert, Tammy wants to share her knowledge with her readers.

Tammy covers and simplifies a range of financial topics, including how start-ups can raise capital and how established businesses can grow successfully. It is clear that she is firmly on the side of Australian small business owners.
Tammy keeps her fingers on the pulse of financial updates. Through her articles, she regularly shares the latest tips and traps around financial products such as business loans and credit cards. She also delivers her information in an easily consumable and interesting way.

Tammy is a keen advocate of promoting financial literacy. She aims to educate small business owners by providing financial insights into common financial problems that businesses face.

“More than anything, I am enthusiastic about using my experience to help Australian small business owners to achieve their financial and business goals,” she says.

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