London Rebuilding Society, itself a mutual not-for-private-profit social enterprise, was established with the commercial objective of becoming a permanent and sustainable institution supporting the growing social enterprise sector.
In order to achieve this we set our fees, interest rates and terms and conditions to cover our costs and protect our funds against losses.
The interest rate, arrangement fee, and terms and conditions are set separately for each loan. These notes are intended only as a guide for enquirers and form no part of any contract, agreement or offer.
Loan Period
The term of the loan will depend upon the needs of the business, but will not normally be less than six months or more than ten years.
Interest Rates
Interest rates are set according to bank rates and market conditions, but also take into account the needs of the borrower and the level of risk involved. Each proposal is considered on its merits. Rates for new loans are generally 9.5% points above bank base rates which is currently equivalent to 10% per annum.
Fees
We charge a non-refundable £50 Application Fee. In addition, we make a single charge to borrowers - a fee for the work involved in appraising the application. The amount of this fee ranges between 1% and 2% of the amount lent (minimum £250), depending on the size of the loan and the amount of work involved. The fee contributes to our costs and enables us to provide support before and after the loan has been approved. Only successful applicants pay the fee. Usually the fee is deducted when the loan is released.
Other Costs
Any fees incurred in dealing with legal issues and registering legal charges will be passed on to the borrower.
Security
We do not normally ask for personal guarantees on loans to enterprises in social ownership (Company Limited by Guarantee, etc.) but may require them when lending to a privately controlled company. We will look to secure our loan against any assets of the organisation where possible. Lack of sufficient security will not necessarily prevent the approval of a loan.
Monitoring
It is a condition of all loans that borrowers co-operate in our regular monitoring, have proper financial systems, and provide quarterly management accounts and annual audited accounts.