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Small Loans for BusinessFrequently asked questions
Small Loans for Business supports existing and new small businesses that cannot raise sufficient finance from other sources or have exhausted traditional routes and still need some additional funds for a specific venture. It is not to bankroll businesses that have run out of cash.
These are some of the most common frequently asked questions relating to Small Loans for Business.
How much can I borrow?
Between £3,000 and £20,000. Applicants need to contribute 30% towards the project cost.
Does my 30% contribution have to be in cash?
Not necessarily, funding from elsewhere can be used but Small Loans for Business will not provide 100% of the project cost.
What is the interest rate?
It is currently fixed at 10.25%
Is there a fee to set up the loan?
No. Only interest on the loan is payable.
What can I borrow the money for?
The money is to support existing small businesses for growth and expansion and for new start businesses.
If my loan is approved when will I get the money?
It is usually within 3 weeks of approval by the panel.
Who, when and where is the panel?
The panel consists of up to four business and professional people from the local area and is chaired by a Small Loans for Business representative.
The panel will usually be local to your county or area and will meet at approximately 6 week intervals.
Can I pay the loan back early?
Yes and there is no penalty for early repayment.
How do I make the monthly repayments?
By direct debit from your business bank account on, or around, the 10th of each month.
Do I make repayments straight away?
The first repayment is due one month after the loan is drawn.
Who may apply for a loan?
Anyone over 18 who has been a resident in the East Midlands for over 18 months and has leave to remain in the UK and is entitled to access public funds.
Do you provide loans to companies?
No. We lend to people who are individually liable for their loan. The loan however, can be invested in companies by recipients.
What if my application is declined?
Loans are discretionary and some applications will be declined. You will be advised in writing as to why the application has not been successful.
What if base rate of interest changes during the term of my loan?
The amount of interest you pay on the loan is fixed so repayments would not change.
I have County Court Judgements against me.
Can I still apply?
Yes. The panel will look at the arrangements you have made with your creditors to settle previous debts and your ability to repay Small Loans for Business and make a decision.
Can I use Small Loans for Business to repay existing debts?
No. The loans are designed to help establish or grow businesses.
What happens if I can no longer afford to make repayments?
If the business is still trading then we may accept smaller repayments for a short period of time. If the business fails then the loan will need to be repaid from other income earned through employment.