Terms for loan

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Our business loan terms are flexible and designed to respond to customer need. Typically, the following loan terms apply:

Who can apply for a loan

Loans are available to limited companies, sole traders, partnerships, social enterprises and other not for profit organisations
Businesses who have been declined a loan or overdraft from their bank or are unable to secure all the finance they need from a bank
Businesses operating in Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk
Businesses whose owners have a poor credit history or no credit history at all
Businesses whose owners have little or no security to offer.

Terms

Loans between £500 and £50,000
Loan repayment periods between six months and ten years
Interest rate 19% (Interest rates may be slightly lower for social enterprises or other not for profit organisations ) APR 20.7%
A typical loan of £10,000 over 60months at 19% has an APR 20.7%
An arrangement fee of 2% (minimum £100) is payable for loans above £3,000. If your loan is for below £3,000 then the fee is fixed at £50. The fee is deducted before the loan is disbursed.
For start up loans you will need to demonstrate that at least 50% of the start up costs have already been raised or that you are in the process of raising them. These funds can be in the form of savings, equipment already purchased for the business, time and labour already invested in the business or funding from an alternative reputable source e.g. parent, friend or bank.
Capital repayment holidays may be agreed, where appropriate
There are no penalties for early loan repayment
Monthly financial figures and copies of monthly bank statements must be supplied to Foundation East once the loan has been drawn
Mandatory coaching for all start up businesses and for some established businesses.

Security

Security will be taken where it is available
Personal Guarantees are required from all directors of Limited Companies. Exceptions may be given to social enterprises and other not for profit organisations
3rd Party guarantees may be required
Costs incurred in the taking of any security will be passed to the client and will be deducted from the loan at disbursal

Application Process

Applications for a Business Loan must be on the Foundation East Loan application form, business plan template and cash flow forecast template. All supporting documentation described on the application form must also be supplied. Applications will not be considered until all requested information is supplied.
We will at all times be fair and honest in our assessment of your proposal.
The Business Loans Manager will help you through the process of applying for a loan. If the Business Loans Manager considers that extra help is needed to develop your business plan he or she may direct you to a support agency e.g. Business Link or other enterprise agency.
Once the Business Loans manager is satisfied that your business plan is a viable one, will meet with you at either your home or business premises to enable him/her to get a better understanding of your business and its requirements.

Monitoring

All loans will be monitored on a monthly basis and financial information including photocopies of your business bank statement must be supplied.
As a condition of our loan we may recommend that a business support organisation or other professional (e.g. an accountant) be appointed as a business advisor

Coaching

It is a mandatory requirement for all start-up businesses and for some established businesses that have been successful in securing a loan, to undertake business coaching through the Foundation East approved programme. The cost for this will be paid for by your business and must be incorporated into the cash flow. For more information, see Coaching.doc

Feedback

We are fully committed to providing the highest standard of service and welcome your feedback. You can help us to improve our service by letting us know if you are either happy or unhappy with the service you have received from us. You can do this via our contact us page