Our Terms

Loans are generally for periods from six months to 10 years, with loans secured on property for periods up to 25 years.

Charges and Interest Rates

We operate a philanthropic banking model. We do not relate our interest rates to bank base rate or LIBOR (London Interbank Offered Rate). We charge charity and other not-for-profit or community profit organisations an interest rate that is generally between 5.5% and 7.5% a year irrespective of base rate. 

Our assessment and due diligence work is time consuming and costly – it’s part of the reason commercial banks don’t do much lending in this market. To help offset these costs we make a one-time charge. Generally this is 1% of the loan amount. This is payable upon acceptance of our terms before the loan is drawn and is not refundable.

Once the loan agreement has been issued you will have up to 30 days to accept the terms and, unless otherwise agreed, a further 60 days to draw all or part of the facility. After this period a non utilisation fee will become payable.

The borrower is also required to pay for any legal and related expenses incurred (for example valuation fees or costs associated with taking charges over property). If we provide a standby or underwriting facility we will discuss an appropriate fee with you.

Repayment

Where a loan is needed pending receipt of a specific amount of money (for example a grant, legacy or VAT reclaim) we may agree that the capital can be repaid in one sum on receipt of the money.

Sometimes we may agree to a repayment holiday for a period of time, during which time no capital needs to be repaid. This might happen, for example, where a borrower is refurbishing a building to rent out, and no income will be generated to cover repayments until the work is completed.

In all other cases we expect capital and interest to be repaid monthly by direct debit.

Security

 

Where there are assets in the project or organisation we may require a charge over these assets. We will discuss with you the amount and form of security we will need. However, in appropriate circumstances, where there are no material assets to be secured, we may consider lending on an unsecured basis.