Pension Led Funding

Business owners can use Pension-Led Funding to utilise the funds currently accrued in their pensions to invest into their own business.

Pension Led Funding

An increasing number of business owners are taking control of their company finances, using their pension as an alternative source of funding. Pension-Led Funding could help your business access the funds you need, with a far greater degree of security and independence than borrowing through the traditional channels; putting you firmly in control of your company’s future. What’s more, pension-led funding could potentially help your pension increase alongside your growing business.

Business owners have, in many cases, accrued funds in various types of pension arrangements over the course of their careers. Pension-led funding could allow you to use your pension fund as a source of commercial finance, potentially providing capital for your business and a return for your pension.

We can help you achieve this by arranging a loan secured against an unencumbered asset, which could include the use of intellectual property (IP).

Alternatively the pension scheme can purchase an asset and lease this back to the company. There are also ways a pension can purchase share capital from the business.

For business owners who have had the foresight to accumulate a reasonable pension pot, collectively or individually, this can be used to provide a highly tax efficient method of funding your business and significantly reduce the risk of exposure to the bank or third parties.

Benefits of Pension Led Funding?

  • Raises capital for any reason, including MBOs/acquisitions.
  • Regain greater control of their company finance
  • Options for future financing
  • Reduces the reliance for loans/overdrafts etc.
  • Provides credit protection for assets within the pension fund
  • Provides possible tax savings and future tax efficiencies
  • Provides potential for significant pension enhancement
  • No credit checking or underwriting
  • No personal guarantees, charge on your house or reporting to the bank
  • No limitation on what the funding is used for
  • No approval, no fees to pay

What is Intellectual Property (IP)

Your businesses IP is a valuable asset which could include your business name, the products or services you make or provide, written or creative material you create, patents and trademarks.

To Summarise...

Pension-Led Funding can help business owners control how their business is funded and how their pension is invested in one transaction. It should be considered as an option for business owners looking for finance with collective pension funds in excess of £50,000. This can also work in unison with other types of commercial finance, and can normally raise up to 65% of the total value of the pension funds.

Contact Sterling Capital Reserve regarding you Commercial Finance requirements