Parfitt, managing director of London-based Business Lending, wants pension funds to start making asset-backed loans to the corpor-ate sector.
Just as in the residential sector, commercial finance has been under the cosh and firms across the UK are finding it difficult to refinance due to the ailing economy.
Parfitt’s plan is to raise around £200m to provide medium-term loans from £500,000 to £10m to smaller companies.
The loans would be secured on commercial property and Parfitt is predicting a return of around 250 basis points above LIBOR.
Parfitt has been exploring the idea since last August and says that although the sector is still under pressure he can detect enthusiasm in the market.
Paul Munford, managing director of London-based Mortgage Centre IFA, says: “This idea seems to have merit and provides a new purchase scheme. It is a tax-efficient way of holding onto assets and could result in high yields.
“That said, if I had a pound for every idea I’ve heard this year I would be a rich man.”
Fahim Antoniades, director at Quantum Mortgage Brokers, says: “Good luck to Parfitt. Any new lending in such a depressed market will be welcomed by all those who can take advantage of it.”