Pension loans have hit the headlines in recent weeks as individuals hit by the tough economic climate have been advised to take personal pension loans which have proven to be disadvantageous and in some cases illegal.
Not all Pensions loans are however the personal pension loans that have come under negative regulatory scrutiny. Owner directors have the ability to interact with a Small Self Administered Scheme (SSAS) to make pension loans available on commercial terms to a sponsoring employer or third party.
Owner directors are able to obtain commercial loans through the utilisation of pension loans from one or more directors’ pension schemes. The directors’ pension scheme is able to make a pension loan to a business as long as:
• adequate security available, as any commercial loan would require
• the term does not exceed 60 months
• the business can demonstrate affordability
Pension loans can prove advantageous for owner directors during these tough economic times, complying fully with pension legislation and aiding the growth of the pension fund.
If you would like to discuss the how a directors pension scheme can make a pension loan, please contact us.