More small businesses are turning to small self administered schemes (SSAS) in order to borrow money from their employees' pensions, according to provider Hornbuckle Mitchell.
With conventional credit streams drying up, some small business owners have used their SSAS to provide them with working capital.
Hornbuckle Mitchell says it has seen a marked increase in the number of entrepreneurs setting up an SSAS due to the flexibility on offer, and the ability to use the money to support the business in a difficult economic environment.
"At a time when business owners may be finding it expensive or impossible to raise funds through their banks, a SSAS can give them access to the capital they need to meet their commercial objectives," says marketing director, Mary Stewart.
An SSAS can loan up to 50% of its asset value to the sponsoring business at rate of at least 1% over the Bank of England's base rate.
With base rate cut down to 2% last week, Stewart says a SSAS can provide a cost effective source of credit as commercial loan rates have soared.
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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