The taxman as an ATM? Two practical examples

Dividend payment with money from tax authorities

For example, we recently received a financing request to finance an entrepreneur to purchase a new commercial property. At first glance, a great case for an investor to finance. The figures showed a significant dividend payout. It was indicated here that this was an offset against an accrued current account receivable from private over the years.

In itself a plausible reason, with the legislation that was forthcoming. The balance sheet eventually reflected that more than a million in VAT, payroll taxes and NOW had to be repaid to the tax authorities over 5 years. So when you flatten it out there is a substantial debt position with the tax authorities. This is effectively public money, which was then used to pay dividends.

Naturally, I was curious to know what was subsequently done with that dividend payment. I was told that a nice boat had been bought because there was so much liquidity in the account anyway. Regardless of what I personally think about this, this is not to be presented towards a Direct Lending Investor or in any of our funds.

Investing from corona scheme

It can also be done differently. I recently came to the attention of a nice hospitality case where the entrepreneurs/operators have the opportunity to acquire the property. Of course, corona was also involved here. The debt toward the tax authorities is substantial, resulting in considerable repayment pressure.

During the corona period, they took the space to renew and upgrade their operation. An “opportunity” presented itself in this way to start investing in the company from the corona arrangements. This is now paying off in a renewed thriving operation. Therefore, despite the high repayment pressure, I expect that we can forge a case here that will allow entrepreneurs to acquire the property. Surely that feels different!

If you know entrepreneurs who are difficult to finance because of a debt to the tax authorities: As long as it can be explained and substantiated, we will be happy to see how it can be done! Take a look at realized funding, where you will find examples of great cases.