Pension Lending for Business

Helping you use your pensions to lend your businesses money

Pension led funding is a real alternative to traditional business lending. With many businesses either not wanting to raise funds from the banks or unable to meet their lending criteria this is a real alternative that is not common knowledge.

Our recommended pension experts can help you take control of your pension. There are no age restrictions and no credit checks. In some situations up to 100% of your pension fund value can be used for lending purposes. However, in most situations this will be 50%.
 

Quick Facts:

Your pension funds can be used for the following: 

  • Lend money to you or your business – maximum of 50% of the pension fund value
  • The loan can be used for any purpose
  • Purchase commercial property - maximum of 50% of the net fund value
  • Pension Loanbacks to connected parties must be secured against assets by way of a first legal charge against appropriate assets 
  • Lend money to unconnected third parties – up to 100% of the net fund value - these loans do not need to be secured against assets
  • HMRC Approved Schemes
  • UK pensions only
  • No age restrictions 

How does it work

 

  1. Your existing pension funds are transferred into a pension contract that can facilitate lending or property purchase.
  2. Typically the transfer process will take between 2 to 6 weeks depending upon your current pension provider.
  3. The funds once in the new pension arrangement (Typically a SSAS) are then available to lend.
  4. A loan agreement is made between the pension and the business.
  5. A repayment schedule is agreed

 


WHY BORROW WHEN YOUR PENSION CAN LEND YOUR BUSINESS THE MONEY!


Helping you to develop and grow your business.
 
Working Example 1 (Loan to Director):

Mr Jones (age 45) formed a limited business and needed to purchase goods to sell to his customers. He had several old pension schemes totalling £120,000.00 and he was able to use his pension to borrow £60,000.00 to establish his business. The loan was secured against the companies premises. But other assets could have been used.

 
Working Example 2 (Loan to Director):

Mr Graham (age 42) had an existing business and wished to raise money to purchase further manufacturing machinery and develop his buniness.  He had several old pension schemes totalling £120,000.00 and he was able to use his pension to borrow £60,000.00 to develop his business. The loan was secured against the companies premises.
 
Working Example 3 (Purchase Business Premises):

Mr Grant (age 53) wanted to use his pension to buy his companies’ office premises. He and his other business partners had pension funds totalling £600,000. He was therefore able to borrow £300,000 against his pension. He could therefore purchase premises up to £900,000.00.
Working Example 4 (Loan to unconnected party):

Mrs James (age 40) used his pension funds to lend money to an unconnected third party. She had several old pension schemes totalling £75,000.00 and she was able to use 100% of her pension for this purpose. As it was a third party the loan did not need to be secured against assets.

Working Example 5 (Intellectual Property)

A limited business wants to use make use of their Intellectual Property (IP) to help raise money to develop the business and purchase new technology. The IP that was owned by the company director could be used in two ways. 1) The IP could be transferred into the pension and then the increased value of the pension used to lend to the company, or 2) The IP could be used as security for lending purposes. Clearly, option 1 would be favoured if the existing pension funds were too small and the business needed to borrow at a higher level.

For further information please use the form above or use our enquiry page. An approved adviser will contact you to discuss your requirements within 24 hours. 
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