Small Loans for Business

Small loans for business provide loans to start-ups, expanding businesses and social enterprises in the East of England region.

How much - £500 to £50,000
Loan term - No minimum, maximum 7 years
Interest - circa 19% per annum, fixed for term of loan

Who is it for?
Loans are for start up and expanding small businesses based in the East of England. Loans may be used for capital investment, working capital, training needs (existing businesses only), bridging finance (e.g. pending receipt of grants).  This is not an exhaustive list.

Eligibility criteria
To be eligible for a small business loan you must have:

For Start Up Businesses

• Proof that you have been turned down for a loan from a bank or building society
• A viable business plan and cash flow that matches the period of the loan
• 2 personal references (per applicant/director)
• Willingness to take part in the mandatory coaching scheme
• Sourced a minimum of 50% from an alternative source or invested an equivalent amount into the business already.
• The last 3 months personal bank statements (per applicant/ director)
• Credit file report (per applicant/director)

For Existing Businesses

As above and

• 2 Trade references
• The last 3 months business bank statements
• Trading profit and loss forecast/projections
• Trade debtor/creditor schedule
• Latest management accounts
• Last 2 years annual accounts (if applicable)

Who is it run by
The loan fund is managed on behalf of EEDA by Foundation East Limited

How can I apply?
To find out if you are eligible for this loan, or to find out more please contact Foundation East on 0845 293 7751 or visit the website www.foundationeast.org, where you will find a complete set of application forms, business plan and cash flow templates along with some case studies of businesses Foundation East has supported through its lending activity.

Security
Security will be taken if it is available. Examples of the types of security Foundation East would consider are equity in an owned property, interest in an endowment policy, personal guarantees, 3rd party guarantees.  This is not an exhaustive list.

Having no security does not mean that Foundation East will not consider your application.

Key terms
Interest rates are 19% per annum fixed for the period of the loan. A lower rate may be offered to Social Enterprises depending on the risk being taken.

An arrangement fee of 2%, (minimum £50 for loans under £5,000, minimum £100 for loans over £5,000) is deducted from the loan at disbursal.

Coaching is provided by a specialist coaching company, the coaching fee is £150 per month. The coaching fee may be paid using vouchers available from Business Link.
Legal costs of circa £500 will be charged if security is to be taken on an owned property, and this fee will be deducted from the loan at dispersal.

Application process
Applicants must submit an application form together with a business plan and a cash flow forecast along with all supporting documentation detailed above.

A business Loans Officer will appraise your application and if they consider your business to be viable will arrange to meet with you at your business premises or home to discuss your application. They will also collect personal identification details and address any issues that may have arisen from the appraisal process. Once the Loans Officer is happy that all issues have been resolved, and if he/she is prepared to recommend you to receive a business loan, will present your application to a Loans Assessment Panel.  The Loans Assessment Panel will make the decision on whether or not to lend.

Coaching scheme
Business Coaching is provided by Trinity Business Coaching, a specialist coaching company.  Most start up businesses and some expanding businesses will be required to undertake mandatory coaching sessions with the specialist coaching firm for the first 6 months of the loan period. The coaching sessions will cost £150 per month and will be paid by the business to the coach directly. The coach can accept E vouchers available from Business Link as payment.

Downloads

Small Loans For Business

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