Interest free loans from £500k upwards

No really – this is not a joke! Loans are available from £500k upwards with no interest charged. As you would expect there are associated fees and charges to access this funding.

However, using a £500k loan as an example – if you were to raise this through ‘conventional’ routes at let’s say a 5% interest rate, this would cost you £5300 per month from your cashflow and you would end up paying just under £640k back + the relevant bank charges for setting the loan up.

Through this alternative route, it would cost you £53k and the loan only needs to be repaid at the end of the term (or in full before the term is up).

The process and associated costs are outline below. To find out more, please email me with an outline of your project.

Stage 1 – A business plan is prepared in the format required for the next step, including an ROI report, financial spreadsheet, broker questionnaire and other associated documentation in preparation to present to the fund brokers, as well as managing the process throughout. For this they charge £2,500+vat. (This is refundable if the loan is eventually granted).

Stage 2 – Documentation is submitted to the fund broker to seek outline approval. The broker prepares all financial information relating to the loan requested that clearly outlines to the client company what commitment is required.

Stage 3 – Once the go ahead is given by the client company, £3,000+vat is payable to the broker to undertake due diligence and make necessary arrangements to source the funds. (This is non-refundable).

An agreement to assign a 10% equity stake to the facilitator of the loan at this stage.

Stage 4 – When the loan is agreed, an insurance premium of 5% loan value is to be lodged in an escrow account – this is insurance for the value of the loan should the company be unable to repay the amount. Once the funds are in transit, this fee is then paid over.

A joint and several personal guarantee is also required from the company directors (typically £100k for a £500k loan, but this will be assessed case by case and advised at Stage 2) as the insurance does not cover all aspects of ensuring the loan is repaid.

Stage 5 – The loan is delivered. 5% loan value fee becomes due.

This process takes between 12 and 16 weeks.

The loan is repayable in full at the end of the 10 year term. It can be repaid earlier but as one lump sum, not staged payments.

Free Resources

Related posts:

‘Bank of Manchester’ could spearhead SME loans A ‘Bank of Manchester’ with £100m to spend on start-ups is one of a number of ideas put forward by Pro Manchester to help encourage...

The Ugly Truth About Free Marketing Leads A marketing lead is the identity of a person or company who might be interested in purchasing goods or services. It’s the first stage of...

£450 million of Discounted Business Bank Loans for SMEs     Small businesses will be able to access an extra £450 million of discounted loans after two high street banks negotiated extra European funding....

The Ugly Truth About Free Marketing Leads A marketing lead is the identity of a person or company who might be interested in purchasing goods or services. It’s the first stage of...

BOE: ‘interest rates may rise’ Interest rates may be increased next year and quantitive easing (QE) could be removed, according to Mervyn King, the governor of the Bank of England....

1 Comment

• The UK needs alternative solutions for SME funding « paulgreen.biz November 27, 2011 at 11:40 am

  [...] £500k interest free loan [...]

  Reply