Third of business owners would consider pension led funding to grow businesses
A third of business owners would consider pension led funding as a potential form of alternative finance to expand their businesses.
The finding emerged in a survey of more than 300 SMEs in the North West of England carried out by tax specialist Enterprise Tax Centre.
Pension led funding (PLF) is being used increasingly by ambitious businesses looking to take advantage of the improving economic climate.
Knutsford-based Enterprise Tax Centre was set up by Andy Wood and Richard Cunningham in March and has since handled dozens of enquiries from business owners looking to access finance to fund their businesses.
Andy previously worked for Grant Thornton, PricewaterhouseCoopers and Ernst & Young, while Richard is ex-Baker Tilly and Deloitte & Touche. Both are chartered tax advisers.
Pension led funding allows business owners to transfer funds from an existing pension scheme to a Small Self-Administered Scheme (SSAS) which then advances a loan of no more than 50% of the available funds to the business.
PLF is an option available to most businesses, irrespective of size or sector. Any money successfully acquired via PLF can be used within a business to provide working capital, help with the acquisition of a target business and fund plant and machinery or commercial property.
Andy Wood, director with Enterprise Tax Centre, said: “Improved business optimism is not being matched by the desire of traditional lenders to support ambitious businesses in the UK.
“This is why there is such a growing demand for alternative finance and why pension led funding is proving one of the most popular with business owners who have liquid funds in a pension. We have received dozens of enquiries since we launched in March.
“Britain’s entrepreneurs back themselves to make a success of their ideas and ventures and like the fact that pension led funding puts them in control of their destiny.
“In addition to business owners, we are receiving a large number of enquiries from accountants, IFAs and other professional advisers who see pension led funding as a funding mechanism to help their clients achieve their goals.”
Enterprise Tax Centre also advises clients on research and development tax credits, Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS) and Capital Allowances.
