P2P business lending platform Proplend has been approved to accept investments from holders of Self-Invested Pension Plans (SIPPs), Small Self-Administered Schemes (SSASs) and other pension funds.
Pension fund investors will, in future, have access to a new asset form and at the same time benefit from the interest earned from loans arranged through the Proplend platform, which will accumulate free of Income Tax.
To safeguard pension holders' interests and help them make the right decisions to suit their own personal circumstances, Proplend has partnered with SIPPclub, a firm specialising in SIPPs and SSASs.
"This represents a significant breakthrough for Proplend", says founder and CEO Brian Bartaby. "Pension investors who have historically been able to invest directly in commercial property, will now be able to benefit from the relatively high returns offered by lending to the owner of a commercial property without being taxed. It moves the pension investment lower down the capital structure from being an equity investment, higher risk, to being a debt provider, lower risk. It also opens the way for much-needed funding to reach the commercial property sector."
Formed in 2013, Proplend offers above-average returns arranged in three tiers according to the position taken, and therefore perceived risk, in each separate loan. Estimated fixed rate returns can range from five per cent to 15 per cent per annum after all fees and default rates have been taken into account. The minimum investment per loan is GBP5,000.
In the event of a default, all loans are secured by a first legal charge over the underlying property. Proplend also creates a reserve for each loan to cover six months' interest payments.