Pension-Led Funding Case Study 8

Pension Led-Funding Case Study 8: Customer Connect UK


The automotive industry is a bellweather for the state of most countries’ economies, particularly through car dealerships and the sales teams that work in them.

A strong economy means new vehicles driving off the forecourts as fast as they can be registered.  A downturn means plans for the new family car or revamped company fleet are put on hold until ‘things get better’. 

For Husband And Wife Team, Catherine And Richard Hawkins, Their Worlds Collided And Changed Dramatically When The Global Economy Went Into Meltdown.

Along with a business partner, Catherine had used her IT and sales expertise to establish a database and telemarketing company aimed specifically at helping UK motor dealerships to save or make money.  Richard, meanwhile, was Dealer Principal for a Hyundai dealership in the South West which had been Catherine’s first client. Then came the recession.

“Until that point, I’d been a very part-time consultant to Catherine’s business because of my 20 years’ experience in car dealerships,” Richard explains. “Although they had good clients, the internal structure and financial controls within her company weren’t ideal, so we had a long conversation with our accountant.”

The result was a complete restructure.  This included Richard retaining his financial interest in the dealership but leaving his operational role to join Catherine in setting up a phoenix automotive telemarketing company, Customer Connect UK, with Richard as sole director.  But, in order to get the new operation up and running, they needed growth capital as well as some financing to help clear outstanding debts – in all, around £70,000 of investment. 

“We just needed a ‘leg up’ to get the business going.  My family had been with one high street bank for around 70 years, but that counted for nothing.  I went to them first just for a small overdraft and they were totally unhelpful.” At that point, Richard remembered a letter he had received about pension-led business funding.  “I’d never heard of it before and thought it was interesting.  At the time, my partner in the dealership wasn’t receptive so I left it on file.  When I mentioned it in relation to Customer Connect, our accountants said they used pension-led funding for other clients and highly recommended it.”

Richard Had A Pension Fund From Previous Employment

The pension was relatively substantial and, after an initial meeting, found he could release up to three quarters of this to put cash into the new business. 

“For quite a complex deal it was a relatively straightforward process,” states Richard.  “The most time consuming part was in deciding which route to take to leverage the money.  In the end we decided to use the Intellectual Property held within the new company, including the web domain.”

Once Settled On IP-Based Pension-Led Business Funding, A Business Plan And Projections Were Put Together

“The service was first class,” claims Richard. “Once all the elements of the paperwork were put in place, the advisers were really helpful in dealing with third parties and were always on the case, chasing things and getting documents signed.”

From submission of the documents to draw-down of the first tranche of cash took three weeks.  “This was even better than had been estimated and, quite frankly, came in the nick of time for us – it was extraordinarily fast.”

Some of the money was used to immediately pay off outstanding debts as well as investing in IT infrastructure.  More importantly, it gave the Customer Connect UK team some breathing space without having to worry about day-to-day finance.  “The appetite was clearly there for what we offer but, because of the way dealerships work, deals can take a month or more to close. We needed to have time to let this happen and, because of the economy, it was even slower than I anticipated when we started.”

However, thanks to the new funding, a more relaxed approached has meant business growth for CCUK, including an initiative with an insurance company linked with the motor trade; business with fleet and commercial vehicle suppliers and approaches from major dealer groups and manufacturers. 

CCUK Has Also Been Able To Reduce Pressure On Human Resources, With The Funding Enabling The Company To Take On Three Additional Members Of Staff

“If the insurance deal goes well, we will almost certainly be taking on three more people within a matter weeks,” says Richard.  “Once you demonstrate success to dealerships they come back, particularly the large dealer groups, and that’s good news for us.

“The funding has taken the pressure off us and that’s been vital. Throughout it all, we receive a very professional, efficient service that has provided alternative funds to a small in business in a quick and easy manner.  There’s no question that small businesses have to look elsewhere for funding these days and pension-led funding offers a highly valuable option.”

Find Out If Pension-Led Funding Could Help Your Business

If you're interested in using the money in your pension fund to support or grow your business, please get in touch using our contact form.

Please Share This

If you’ve found this page of interest, please would you kindly send a link to it to your friends and colleagues using the buttons below.  You’ll be helping us out, and they might like it too.  Thanks, it's much appreciated.


AJ Bell Is Often The Best Value SIPP For Stockmarket Assets

That's our opinion.  Not just because AJ Bell was the first company to offer an online SIPP.  Nor that it's received many prestigious awards.  And not even because the wife of SIPPclub's Founder has an AJ Bell SIPP.  It's because it's one of the most competitive stockmarket SIPPs on the market. 

Over time, charges can wipe out a huge part of your fund.  We like AJ Bell because there are no set-up costs.  If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund.  And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).  However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.

Visit AJ Bell

Get Valuable SIPP And SSAS Insights Emailed Directly To Your Inbox Every Monday

  • Please use an email address you can access. You can unsubscribe at any time.

As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from  Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.

Please read our full Terms which includes criteria for SIPPclub membership.