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Business Investor Loan

Provide real growth in your pension provisions

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“At Bluecygnet Finance we are constantly on the look-out for creative and successful business finance products for our clients.

They must be innovative, easy to understand and less expensive than otherwise available.”

Pension-Led Funding Pension-led funding works by deploying funds from the business owner’s own accumulated pension pot, in accordance with HMRC regulations. These will be repaid to the scheme with interest at a commercial rate. Typically this is achieved by the pension making a loan to, or purchasing an asset (such as shares) from, the business, with it subsequently making loan/lease payments back. This methodology utilises value in commercially-owned assets including intellectual property. No personal guarantees are required, however some future pension benefits may be at risk if repayments to the scheme are not made.

Example:

Company Considerations Amount Outcome
Facility Amount £75000 Funds forwarded to the business
Term 60 Months Term in months of the arrangement – agreed prior to commencement of the transaction and agreed by Trustees, borrowers and their professional advisers as being affordable over the term length
Type Loan Capital Repayment and Interest
Interest Rate 5% Typical proposed Interest Rate – agreed prior to commencement of the transaction and agreed by Trustees and borrowers
Arrangement Fee £1,375 There may also be additional costs associated with the setting up of the pension scheme
Annual Renewal/Service/Admin Fee £0 Typically there are no annual renewal fees
Security   First charge on an unencumbered asset of equal value plus interest of the loan
Annual Interest £1,948.08 Average annual interest payable on a reducing balance basis
Cost to company over term £11,295.40 The cost to the company over the period of the loan – arrangement fee + interest payments

Disclaimer The information provided does not constitute financial advice and is provided for illustrative purposes only. Interest rates and costs illustrated are informed by our knowledge of current financial markets. These may differ depending on individual business circumstances. Bluecygnet Finance accept no liability for the accuracy of the information now or in the future. This form of funding illustrated may not be suitable for all business owners; therefore, you should seek advice from a professional financial adviser. Pension-led funding involves complex products and can involve a level of risk that can result in significant capital losses that may have a detrimental effect on the value of the fund. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Think carefully before securing commercial debts with a personal guarantee or your home.

About Me

I have over 30 years corporate finance experience with major UK and International organisations, I am now fully focused on providing independent finance help to UK businesses.

Business Investor Loans

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