Directors turn to their pensions to fund growth Adam Tavener, chairman of Clifton Asset Management, which advised DMACK on its fund-raising, said his company has released £250m for 1,200 companies using this approach. He admits it can be a risky ploy. You have to start from the point of view that this is for business owners who think their company is sound, has a bright future and is worth investing in. It's not for basket cases. But many perfectly good businesses can't get bank funding. You should do it if you think investing in your business is a safer bet than investing in other businesses. For the vast majority of directors we deal with, the amount of money they have accumulated in their pensions isn't enough to support their lifestyle in retirement anyway. Another advantage is that it puts to work assets such as patents, copyright, designs, brand or trademarks which businesses often undervalue and don't capitalise on, Mr Tavener added. He admitted that a business failure would risk a director losing their accumulated pension fund, but claimed that in some respects, pension-led funding can be lower risk than a bank loan. Most small business owners have to give the bank a personal guarantee. I can never say I'm going to make you bankrupt or repossess your home. They are real outcomes from commercial lenders. A business owner will never withdraw funding on themselves. Mr Cormack, who is predicting that sales will grow from £1m to £6m this year, is happy with the results. Other companies should look at this - I've recommended it to two friends. If you believe in the business you're in, it's a good way of getting the funds you need to grow. Mr Tavener argues that the biggest obstacle to wider uptake of pension-led funding is the fact that most companies are unaware that it exists. It's a matter of educating business owners and their advisers, including their banks. It's not an either/or and the banks and other funders are gradually recognising the benefits. However, there have been concerns over optimistic valuations of IP used to facilitate pension-led funding, and of increased complexity if a business is sold since crucial IP is owned by the pension fund rather than the company.