PLF offers small and medium [SME] business owners and directors the opportunity to reinvest their pension funds into their own ventures and companies.

The businesses seeking PLF come mostly from sectors within retail, construction, technology and manufacturing, and are almost entirely small businesses. 60% of respondents in the report had five employees or fewer, but 43% increased their staffing levels after raising funds via PLF.

Almost half have been trading for more than 10 years.

75% had begun using PLF in the last three years, and just over half of fundraisers said that they would have been unlikely or very unlikely to secure funding elsewhere.

Since obtaining funding, 62% have seen their profits grow and 59% have increased turnover. Some 47% have also been able to launch new products or services due to PLF.

Despite this, pension-led funding only saw 5% average growth between 2012 and 14, the lowest of all forms of alternative finance. To compare, the second-lowest increase was seen in donation crowdfunding, which grew 77%.

In October, pensionledfunding.com, owned by Clifton Asset Management, estimated the average SME owner pension pot to be £75,000, three times the government figure of £25,000.

With 3.1m SME owners and directors owning a private pension pot, this would mean over £100bn of finance could be secured directly through directors’ or business owners’ pension funds.

April this year saw the introduction of the pension freedom rules, which allow savers aged 55 or over access to their defined contribution pension pot. 25% can be cashed in tax free and the remainder is subject to income tax.