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A successful business needs capital but all too often a lack of finance is stifling the growth entrepreneurs are desperate to achieve.

Many business owners may already have the money to finance their goals but either don’t realise it or need help to unlock that untapped potential.

With all the talk about the different types of funding that is available to business owners there is often one option that is often overlooked.

There is a form of business funding where the interest you pay on the finance provided is paid back to you.

As a business owner, not only can you grow your business with the funding it requires, you can potentially increase your net worth at the same time.

Why haven’t I heard of this funding before?

I know that it seems too good to be true but unlike many newer forms of alternative finance out there, this has been available since the 1970s. It is tried and tested and is regulated by the Financial Conduct Authority.

Pension-led funding allows the SME owner, or owners, to invest a portion of their pension assets into the business without the need for personal guarantees or charges over domestic assets.

The interest on this finance is paid back into the pension, with tax benefits from a business point of view and the added advantage of a growing pension. The business owner can secure finance for a range of business reasons while staying in control of their company.

Pension led funding has now helped more than 2,000 UK SMEs finance their own business to the tune of more than £227 million using money from accumulated pensions as an alternative source of business funding.

These companies had a collective turnover of £1.6 billion and provided more than 16,000 jobs.

The recent Nesta report, compiled in conjunction with Cambridge University, found that Pension-led funding investment was worth £24 million in 2015. The report also found that 73 per cent of SMEs using PLF saw their profits rise and almost half employed more people.

Pension led funding is ideal for SMEs seeking working capital for growth or enhanced cash flow. It is not sector specific and 97 per cent of pension funded businesses are still successfully trading after five years.

Adam Tavener, Clifton Asset Management

Do I qualify?

Are you a business Owner with more than £50,000 in pensions?

Contact us here for more information or to request a referral for a no obligation review.