Investment Options for Business Cash

Discussion in 'Accounts & Finance' started by Mark M, Feb 15, 2021.

  1. Mark M

    Mark M UKBF Newcomer Free Member

    6 0
    Hi, my business is in the lucky position of earning more than it is receiving, and has for a while now. It has now got a reasonable amount of cash just sitting in the current account earning 0%.

    Since savings accounts are offering almost 0% too, I thought I would like to invest some of the cash on the company's behalf in an index fund or some UK/US bonds.

    Could anyone recommend somewhere I could invest this for the company (LTD)? I've inquired with Hargreaves Lansdown but they are not accepting company applications at the moment. Thanks!
     
    Posted: Feb 15, 2021 By: Mark M Member since: Feb 15, 2021
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    27,231 3,345
    Earning more than it is receiving - perhaps improve methods of collection? Letter before action perhaps?

    What are your goals for investment? What are you looking for in terms of access, time etc.
    Ideally sit down with a financial advisor and work out what should be done with the money.

    Some would suggest assets are the way to go for a business - something tangible that could be liquidated or borrowed against, something that adds value to the business for the future.
     
    Posted: Feb 15, 2021 By: Mr D Member since: Feb 12, 2017
    #2
  3. Mark M

    Mark M UKBF Newcomer Free Member

    6 0
    Apologies, that should have said earning more than it is spending...

    Would want close to instant access to cash so I don't know if assets are a great idea?

    The goal is purely to achieve something like 3-4% growth on say a 40% chunk of the cash. Basically it just feels criminal to let the cash sit there :(

    I think an advisor is a good idea, and I will chase that up, just looking for quick tips here, if anyone happens to know of some. Thanks.
     
    Posted: Feb 15, 2021 By: Mark M Member since: Feb 15, 2021
    #3
  4. Spur Support Services

    Spur Support Services UKBF Regular Free Member

    195 41
    Now is a really good time to speak to your accountant to optimise your fiscal year position, irrespective of your year end, to ensure that you are satisfied that investing within the limited company is the best choice for your personal and business circumstances.
     
    Posted: Feb 15, 2021 By: Spur Support Services Member since: Aug 21, 2020
    #4
  5. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

    5,376 2,188
    HL - or any share based platform - won't give you any guarantee of returns (your capital is at risk etc)

    I'm actually in a similar position, so have done some research. TBH, my current answer (to be run by my accountant) is simply to draw it as a DL and bung it into premium bonds.
     
    Posted: Feb 16, 2021 By: Mark T Jones Member since: Nov 4, 2015
    #5
  6. Mark M

    Mark M UKBF Newcomer Free Member

    6 0
    Thank you. Yes, that's another option I hadn't thought of.
     
    Posted: Feb 16, 2021 By: Mark M Member since: Feb 15, 2021
    #6
  7. Darren_Ssc

    Darren_Ssc UKBF Ace Free Member

    1,657 594
    Vangard

    But, not a good option for short term savings.
     
    Posted: Feb 16, 2021 By: Darren_Ssc Member since: Mar 1, 2019
    #7
  8. Mark M

    Mark M UKBF Newcomer Free Member

    6 0
    How do you invest via Vanguard, what broker do you use (for a limited company)?
     
    Posted: Feb 16, 2021 By: Mark M Member since: Feb 15, 2021
    #8
  9. Darren_Ssc

    Darren_Ssc UKBF Ace Free Member

    1,657 594
    Direct or via HL
    I don't think you can though for a LTD unless you are paying into a pension?
     
    Posted: Feb 16, 2021 By: Darren_Ssc Member since: Mar 1, 2019
    #9
  10. mattk

    mattk UKBF Newcomer Free Member

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    Does the company potentially need the money in the future or is it in fact retained profits which you don't want to extract due to incurring taxes?

    If it is the later, then making an employer's contribution of up to £40k per year into your pension is the most tax efficient and will likely give you the best long term return.
     
    Posted: Feb 16, 2021 By: mattk Member since: Dec 5, 2005
    #10
  11. Mark M

    Mark M UKBF Newcomer Free Member

    6 0
    Yes, it's retained profits.

    Yes, have considered pension contributions, could be ideal but that does lock the money away for me for a good 15-20 years.

    Basically just looking for something low maintenance (premium bonds may work) to earn some interest.

    Ideally I'd like to invest in a passive equity index fund but HL won't do this at the moment for companies.
     
    Posted: Feb 16, 2021 By: Mark M Member since: Feb 15, 2021
    #11
  12. Mr D

    Mr D UKBF Legend Free Member

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    Multiple places will offer some return on the money, may get better rates by having money tied up for a while like a year or two.

    Perhaps split the total you want to invest into chunks, some at a low rate but quickly available and some with penalties or hard to get out and tied up for a year or two - but at higher return.
    So if you need to access a sum you are not messing up the entire investment.
    May not be cost effective to split though.
     
    Posted: Feb 16, 2021 By: Mr D Member since: Feb 12, 2017
    #12
  13. Mark M

    Mark M UKBF Newcomer Free Member

    6 0
    Hi Mr. D,

    Thank you. Could you tell me the name any broker that will allow the company to invest in a simple passive index tracker fund? That's really all I'd like to know. Thanks!
     
    Posted: Feb 16, 2021 By: Mark M Member since: Feb 15, 2021
    #13
  14. Mr D

    Mr D UKBF Legend Free Member

    27,231 3,345
    Sorry, not looked at business investment in 19 years.
     
    Posted: Feb 17, 2021 By: Mr D Member since: Feb 12, 2017
    #14
  15. Mattymoomoo

    Mattymoomoo UKBF Newcomer Free Member

    24 9
    A lot of the comments above are good and it depends on your investment timescale and risk tolerance. I hate premium bonds but there has been so much talk of a stock crash (given markets are higher than before covid and we are not fricken out of it yet) that unless you are looking long term and wont need the funds, id say that this is the way to go. Im guessing after summer we will know a lot more.
     
    Posted: Feb 17, 2021 By: Mattymoomoo Member since: Sep 15, 2020
    #15