Pension Led Funding - Business Start Up
Discussion
I'm looking to fund my start up business and was hoping for a small (5k to 10k) grant would be available to help me assess the businesses viability but no such grants exist here in Bonny Scotland.
So my next line of inquiry is relating to Pension Led Funding, in other words, can I use some of my pension to fund my start up?
Has anyone here done this?
I have found some companies on-line offering this service but I need to perform my own due diligence before committing to this route, hence PH!!
Cheers
Pete
So my next line of inquiry is relating to Pension Led Funding, in other words, can I use some of my pension to fund my start up?
Has anyone here done this?
I have found some companies on-line offering this service but I need to perform my own due diligence before committing to this route, hence PH!!
Cheers
Pete
I would use it either to buy shares in my Limited company or loan the money from my pension to my company.
Its something I came across today during my research. It’d be my first round of raising cash for the business and I want to know it’s viable.
But I’m aware there are plenty of pension scams out there and I’m keen to avoid such ventures.
Its something I came across today during my research. It’d be my first round of raising cash for the business and I want to know it’s viable.
But I’m aware there are plenty of pension scams out there and I’m keen to avoid such ventures.
2 GKC said:
Simpo Two said:
No savings?
Great post. I’m sure he hadn’t thought of thatFunding from savings would be ideal however I don’t have enough to spare but I do have a healthy pension pot.
The money would be for a patent, at least to see if I can get one for my design. The plan being to get a patent in place then license the design off. Or at least cover the initial work of a patent attorney to figure out if a patent or a registered design is suitable and get a bespoke NDA so I can start talking about the design. £5k or so out of my pension to find out I can’t protect the design would be annoying but I could live with it, or I could be right about the business and my pension takes an uplift.
I’m not set on this method of funding, I just came across it and it seems to suit and thought I’d ask on this forum as there is a wealth of info here. I thought make someone here might have used this method and could share opinions.
The money would be for a patent, at least to see if I can get one for my design. The plan being to get a patent in place then license the design off. Or at least cover the initial work of a patent attorney to figure out if a patent or a registered design is suitable and get a bespoke NDA so I can start talking about the design. £5k or so out of my pension to find out I can’t protect the design would be annoying but I could live with it, or I could be right about the business and my pension takes an uplift.
I’m not set on this method of funding, I just came across it and it seems to suit and thought I’d ask on this forum as there is a wealth of info here. I thought make someone here might have used this method and could share opinions.
Good reply. The problem with patents, if Dragon's Den is anything to go by, is that the Chinese will simply ignore it, copy the product and pump them out for half the price. Maybe that doesn't apply in your market. But I wish you luck 
The resident pension experts are Intelligent Money; they'll be able to say if you can pillage £5K.
The resident pension experts are Intelligent Money; they'll be able to say if you can pillage £5K.
pete_esp said:
I'm looking to fund my start up business and was hoping for a small (5k to 10k) grant would be available to help me assess the businesses viability but no such grants exist here in Bonny Scotland.
So my next line of inquiry is relating to Pension Led Funding, in other words, can I use some of my pension to fund my start up?
Has anyone here done this?
I have found some companies on-line offering this service but I need to perform my own due diligence before committing to this route, hence PH!!
Cheers
Pete
Hi PeteSo my next line of inquiry is relating to Pension Led Funding, in other words, can I use some of my pension to fund my start up?
Has anyone here done this?
I have found some companies on-line offering this service but I need to perform my own due diligence before committing to this route, hence PH!!
Cheers
Pete
I have used pension led funding 3 times:-
1. to lend a company money
2. to invest in newly issued shares of company
3. to buy some of my shares in a company (to boost the value of my pension, post a divorce)
The reality is that I don't think you will be able to do it, ultimately the fees are high as it's a non standard product, and unless you're talking high six figure numbers, it won't be economically viable.
Also, it most likely won't pass the commercial arms length tests, unless your new business has some value.
In the case of lending money, you need something to secure it against (in my case that was IP valued at seven figures)
In the case of investing / buying shares, the shares need to be formally valued, again, unless you have some value, then it won't pass the test.
I am a mentor for the Start up Loans scheme, which is a Government backed scheme that offers start ups loans of up to £25k, I'd suggest you'd be better off looking there for money. No PGs and as long as you have good personal credit and a business plan, then you're highly likely to get accepted. They are available via Scottish Delivery partners.
Good luck with the new venture
foliedouce said:
Hi Pete
I have used pension led funding 3 times:-
1. to lend a company money
2. to invest in newly issued shares of company
3. to buy some of my shares in a company (to boost the value of my pension, post a divorce)
The reality is that I don't think you will be able to do it, ultimately the fees are high as it's a non standard product, and unless you're talking high six figure numbers, it won't be economically viable.
Also, it most likely won't pass the commercial arms length tests, unless your new business has some value.
In the case of lending money, you need something to secure it against (in my case that was IP valued at seven figures)
In the case of investing / buying shares, the shares need to be formally valued, again, unless you have some value, then it won't pass the test.
I am a mentor for the Start up Loans scheme, which is a Government backed scheme that offers start ups loans of up to £25k, I'd suggest you'd be better off looking there for money. No PGs and as long as you have good personal credit and a business plan, then you're highly likely to get accepted. They are available via Scottish Delivery partners.
Good luck with the new venture
Hi Foiled!I have used pension led funding 3 times:-
1. to lend a company money
2. to invest in newly issued shares of company
3. to buy some of my shares in a company (to boost the value of my pension, post a divorce)
The reality is that I don't think you will be able to do it, ultimately the fees are high as it's a non standard product, and unless you're talking high six figure numbers, it won't be economically viable.
Also, it most likely won't pass the commercial arms length tests, unless your new business has some value.
In the case of lending money, you need something to secure it against (in my case that was IP valued at seven figures)
In the case of investing / buying shares, the shares need to be formally valued, again, unless you have some value, then it won't pass the test.
I am a mentor for the Start up Loans scheme, which is a Government backed scheme that offers start ups loans of up to £25k, I'd suggest you'd be better off looking there for money. No PGs and as long as you have good personal credit and a business plan, then you're highly likely to get accepted. They are available via Scottish Delivery partners.
Good luck with the new venture
That’s brilliant, exactly the sort of insight I was hoping would exist on PH. I’ll take that on board.
I’ll take a look at the start up loans scheme as it sounds suitable. But my main concern is that the loan will want payments before my venture starts generating income so I’ll need to figure that out.
Can I ask, how do you value IP?
Pete
pete_esp said:
Hi Foiled!
That’s brilliant, exactly the sort of insight I was hoping would exist on PH. I’ll take that on board.
I’ll take a look at the start up loans scheme as it sounds suitable. But my main concern is that the loan will want payments before my venture starts generating income so I’ll need to figure that out.
Can I ask, how do you value IP?
Pete
The pension provider instruct a specialist to do it. From memory, which may not be 100% accurate as it was a few years ago, the IP valuation alone cost £6kThat’s brilliant, exactly the sort of insight I was hoping would exist on PH. I’ll take that on board.
I’ll take a look at the start up loans scheme as it sounds suitable. But my main concern is that the loan will want payments before my venture starts generating income so I’ll need to figure that out.
Can I ask, how do you value IP?
Pete
Re start up loans, you used to be able to defer payments for 3 months, but I’m not up to date on the latest terms since they did a reorg. Suggest calling one of the local delivery partners who will be able to guide you on the art of the possible.
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