Short Term Loans against Pensions

AtPledge has launched a new service allowing businesses to secure loans against the value of their pension schemes. It is a simple process, which provides the necessary security for us to lend funds to businesses in need of urgent finance.
 
Founded by Marcus Reeder, AtPledge in the UK provides loans of between £300,000 and £1m to individuals against their valuable assets.
 
It has launched the new service to help company directors borrow against their pension schemes, as they convert to small self-administered schemes (SSAS).
 
The loan is repaid from the pension scheme once converted to SSAS.
 
SSAS, an occupational pension scheme under trust, is the only type of pension scheme that can provide loans for a business and must be registered with HMRC.
 
Participants of the scheme must create a sound business plan for approval by SSAS trustees, detailing how much finance is needed and how it will be paid back. Most company directors use the FD to produce the business plan, so that it seamlessly fits with and explains the needs of the business.
 
If the trustees of the pension fund decide a business is a “viable investment”, they can lend up to 80% of its funds if the business is not connected to the pension fund beneficiary – or 50% if it is.
 
Reeder commented: “Since the credit crunch, many individuals and companies are still finding it hard to secure credit, even if they are a low risk. As a direct consequence we have a growing amount of people approaching us for loans against their pension schemes, which they are then converting into SSAS so that they can borrow from them. Most clients are successful in changing their pensions to SSAS, so we are happy to lend against this.”
 
The typical loan to value for this kind of lending is 60%