FAQs - Business Loans
1. How much can I apply for?
£500 - £50,000
2. What interest rate will I be charged?
Typically 20.7% APR (Underlying rate 19%)
3. What does APR mean?
APR stands for the Annual Percentage Rate of charge. You can use it to compare different credit and loan offers. The APR includes important factors such as:
- the interest rate you must pay;
- how you repay the loan; the length of the loan agreement (or term); frequency and timing of instalment payments; and amount of each payment;
- certain fees associated with the loan; and
- premiums for payment protection insurance that the lender chooses to make compulsory.
All lenders have to tell you what their APR is before you sign an agreement. It will vary from lender to lender. Generally, the lower the APR the better the deal for you, so if you are thinking about borrowing, shop around. ("Money Made Clear" - Financial Services Authority - June 2008)
4. What is it likely to cost?
A typical loan of £12k repayable over 5 years costs with a 2% arrangement deducted from the loan will cost £311.29 per month
5. How quickly do I have to repay Foundation East?
Typical repayment periods are between 6 months up to 10 years
6. I have no money of my own to invest, is this a problem?
Not necessarily. We are looking for a good idea, viable plan and lots of determination.
7. I have no security to offer, is this a problem?
Not necessarily - see point 6 above
8. I have no credit history/ I have a bad credit history, is this a problem?
Not necessarily. Just be honest with us from the start - that is all we ask.
9. How is interest calculated?
Interest is calculated on the outstanding balance on a daily basis. It is applied to the loan balance monthly.
10. What if I want to repay earlier?
a) We are happy to accept ad-hoc repayments (in addition to scheduled ones) which will reduce your loan balance and, therefore, the total interest due over the period of the loan. There is no charge for this.
b) If you wish to repay the entire loan early, you may also do this without charge.
11. How do I make repayments?
Monthly by direct debit. If you do not have a bank account we may be able to assist you in opening one.
12. Is there any proposal we won’t finance?
We do not have any specific sector that we either target or avoid. The only overriding criteria we apply is that the purpose of the business must be legal and, as a Values-driven, ethical. We would not finance any activity that we feel might bring us into disrepute.
This happens about once in every 100 applications received so don’t be out off at this stage
13. What geographical areas do you operate in?
We lend to businesses based in / primarily operating in the East of England – this comprises Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk.
14. Do I need to provide “match funding”?
Some lenders (including banks occasionally) will only lend you part of the cash you require to start or grow your business, insisting that you find the remainder elsewhere.
Whilst we recognise that personal investment can lead to personal commitment, here at Foundation East we also understand that some people only have their time, skills, energy and enthusiasm to contribute.
Alternatively, if you are able to obtain some support form the bank then that is great. If you need us to provide “match funding” for them then we will be pleased to consider your needs.
The presence or lack of “match funding” or personal investment will not speed up or slow down the application process in anyway. It is the idea, the business and, most importantly, the person that we lend to and, since we do not rely on computers to make our lending decisions, we need time to formulate our opinions.
15. What if I wish to make a complaint?
We have a standard complaints procedure, and welcome feedback if you feel we have fallen below our usual standards of good service.
However, we would advise that our Complaints Procedure is aimed at customer service, and does not cover where your application for support has been declined for commercial reasons by your allocated Loan Manager or by our Loan Assessment Panel (LAP)-see FAQ 15 above