Pension Led Funding (PLF) is a unique mechanism that allows business owners to use their pension funds to provide finance to their own business, therefore reducing reliance on banks and removing pressures imposed by external lenders with the interest charged going back to the owner’s pension fund and not being lost to the lender.
PLF involves setting up a specific type of pension scheme, known as Small Self-Administered Scheme (SSAS) that has several unique features that other types of pension scheme don’t. These include the ability to make loans to businesses and enter into other types of transaction such as the purchase or shares or assets from the business.