Two hundred and fifty million reasons why Pension-led funding changed perceptions . . . forever

Pensions, boring, right? Too right. You pay into them for ages, often from money that you would prefer to spend elsewhere, you can’t control what happens to your cash when it’s in there, and you can’t get your hands on it ‘till your 55. Everyone knows you should have one, but what a yawn.
But not if you’re a business owner. Then it’s all change, and hooray for pensions! Why? Because suddenly the dullest part of your financial landscape just became the key to realising your business goals by being able to access really attractively-packaged funding to grow your enterprise.
Although business owners have, since 1979, been able to access their pensions to support growth plans it is only really in the last five years or so that Pension-led funding has evolved into a recognised and clearly defined SME finance product. During this time Clifton Asset Management, by far and away the UK’s largest and most respected provider of PLF, have facilitated total SME financing of approximately £250 million. That’s pretty significant for a little known and dull sounding product.
From a broker’s perspective the advantages of understanding and promoting this product are evident. Highly competitive commission terms and second to none customer service are the obvious start points, but the real win is the client benefit. Because of its unique structure and capabilities, PLF can lend against a range of assets that cannot normally be utilised, such as databases, trademarks, knowhow and goodwill, leaving the broker free to leverage the more traditional assets with more conventional products, such as invoice financing, to provide a blended funding solution and, crucially, real value in advising their client.
From the client’s perspective the idea of being able to pay a competitive rate of interest back to their own pension, and to use that pension to drive business growth, and thus value, is a brilliant outcome, since the pension drives growth in the business which, in turn pays more back to the pension. Happy customers and a win-win.
The technical nature of Pension-led funding means that brokers are not asked or required to do any packaging whatsoever to receive our maximum commission terms. A simple referral with contact details, a brief description of the customer needs and pension position, and that’s it. This can be done online through our broker portal, or in a more old fashioned way. If you have a few questions before referring just pick up the phone! All of the compliance is dealt with by us as we have all the relevant permissions necessary to transact this type of business.
Our key message to brokers remains the same – when doing your fact-finding do not forget to ask about the client’s pension situation! If you don’t ask you may well be losing valuable business and a great opportunity to both impress and assist your client.