Terms & Conditions

These are the terms that you, the applicant, agree to when applying for a loan with the Business Enterprise Fund

1) Background

a) Loans from Business Enterprise and Finance Limited (BEF) are available to individuals and companies who have been refused other forms of business finance from mainstream providers such as banks. Where an applicant has been offered insufficient finance from other sources the Fund can offer “top-up” finance Loans are available from £500 up to £150,000 to start or expand a business.

b) Terms of up to 10 years are available. A capital repayment holiday of up to six months may be available with the agreement of the Credit Committee/Fund Management.

2) Purpose of Loan

a) If a Loan is offered it is on the condition that the money will be invested in the nominated business as proposed in the Business Plan & Application Form. However in the case of consumer credit loan agreements, if you accept the Loan it will be a personal debt and not dischargeable by winding up your proposed/existing business. BEF will use every facility available to pursue repayment of the Loan.

3) Application Process

a) The Applicant(s) must demonstrate the viability of the business proposal by the provision of a “robust” business plan. The Applicant(s) must demonstrate a clear understanding of the business planning process (including how to prepare financial forecasts) or undertake training to obtain these skills.

b) An Investment Manager will be appointed to assist in the business planning process and there may be a charge for the preparation of your Application whether successful or not. If your Application is unsuccessful or withdrawn, and the Fund has provided assistance to you in the preparation of that Application, you hereby agree to pay the Fund for any reasonable costs incurred.

c) The Investment Manager will present the business case to the credit committee.

d) Applicants will be informed of the decision afterwards and these decisions are final with no right of appeal.

4) Fees and Charges

Arrangement Fee a) The Arrangement Fee is the amount you must pay for the cost of the preparation and administration of your loan application and loan agreement. The fee is calculated as 3.5% of the drawdown amount in the loan agreement (subject to a minimum charge of £50) plus any additional charges made for the arrangement of security under the loan agreement. There is no arrangement fee for loans approved under the Start-Up Loans program.

Repayments a) Repayments are made on a monthly basis by Direct Debit. There is a penalty for late payment of an instalment by the due date unless this is approved in advance of the due date of the direct debit payment.

Security a) Security is generally required for loans over £50,000 and in many cases guarantees are necessary. Where there is not sufficient security available the Fund may also consider the use of the Enterprise Finance Guarantee Scheme (EFG); this is at the sole discretion of the Fund. (Please see below for details of the charges made for arranging items of security.) Legal and Admin Fees a) You must pay all reasonable costs and expenses incurred by BEF as a result of you defaulting on or breaching the loan agreement or your loan agreement being terminated for any reason or any action by you that results in, BEF taking steps to recover money from you or rearrange the collection of repayments from you, including any restructuring or variation of the loan agreement or, any additional work whatsoever carried out by BEF or its agents after the loan agreement has commenced and not caused by our own negligence.

b) In the event of non-payment, BEF may use a debt recovery agent or our lawyers to recover any monies owed by you and you will be required to pay the full amount of any fees charged, costs, expenses or disbursements incurred as a result of your non-payment.

c) In the event that Court judgement is obtained BEF may use enforcement officers or other lawful means to enforce the judgment against you. Any costs incurred by BEF after a court judgement has been obtained against you as a result of breaking this agreement will be added to your total judgement debt so that you may have to pay us both the amount of the judgement and our further costs and expenses until you have paid these in full. This means that even if you pay off the whole amount of the judgement you may still have a further sum to pay.

d) In the same way, interest may be applied at the statutory rate to any outstanding balances after judgement has been obtained.

e) The table below provides details of the charges made by BEF in respect of actions and events that may occur during the course of your loan agreement including legal action.

FIXED FEES

Variation to Loan Agreement: £30
Default Notice: £25
Termination Letter: £25
Issue of Online Debt Recovery Claim: £50

Items of Security

Company Debenture 2nd charge on land Chattel Mortgage: £275 (per item)

If more than 3 hours work is done by our legal and admin teams in arranging the security then the fixed fee will no longer apply, you will be notified and charged at the appropriate hourly rate below.

First Charge/ Property Purchase: £375
Enterprise Finance Guarantee (EFG): £50

HOURLY RATES

The following rates will apply for work done by BEF’s in-house teams relevant work will be time recorded and charged to the loan account.
Qualified Lawyer: £150
Trainee Lawyer  & Paralegals: £100
Administration Staff: £60


DISBURSEMENTS

Any legal costs and expenses reasonably incurred by BEF in respect of a loan agreement properly entered into, will normally be passed onto the Client. Except where such costs and expenses result from the Fund’s own negligent acts or omissions.

5) Performance Monitoring

a) The Borrower who receives a Start Up Loan from BEF is required and agrees to provide BEF with a monthly update on business performance and an income & expenditure report showing details of their cash flow and or management accounts each month.

b) In the case of all loans provided by BEF, other than Start Up Loans, the Borrower is required and agrees to provide BEF, as a minimum by way of financial information, with a copy of their full annual business accounts each year.

c) In addition, the Borrower agrees to provide BEF promptly with such financial or other information as BEF may from time to time reasonably request to enable BEF to understand and assess the financial position and performance of the Borrower’s business

d) You will be subject to regular visits from Fund staff and there are stringent requirements for the provision of information during the Term of the Loan. These include access to bank statements and the provision of management accounts, to a satisfactory standard, on an annual basis.

6) Data Protection and Disclosure Declarations

a) On agreeing to the Acceptance of Terms & Conditions you agree to Business & Enterprise Finance Limited completing a credit check on you and providing your information to any organisation/individual associated with the provision of the funding requested or that BEF considers relevant to a legitimate purpose or interest identified with the funding. Your information may also be used for direct marketing purposes. If you do not wish any of your details to be used in this way or passed onto a third party you must not sign this document.

b) By agreeing to the Acceptance of Terms & Conditions you are giving your permission to BEF, and the Government if the Application is processed under EFG procedures, to:

i. make any enquiries about your Loan Application; ii. take up references about you and your business; iii. give information to each other about you and your business; and iv. give information to any official involved in running or monitoring the EFG scheme

c) By agreeing to the Acceptance of Terms & Conditions you are accepting that the information you give may be used for the purposes of preventing and detecting crime and that any misleading statements (whether deliberate or accidental) given at any stage during the application process may render the Application invalid and the Applicant(s) may be liable to return any money already paid out.

d) By agreeing to the Acceptance of Terms & Conditions you are giving your permission to BEF to approach your bankers and/advisors for clarification should the need arise.

e) By agreeing to the Acceptance of Terms & Conditions you agree to be bound by these terms and conditions

NOTE: BY MISLEADING OR GIVING FALSE INFORMATION IN THE PROCESS OF THIS APPLICATION YOU MAY BE GUILTY OF A CRIMINAL OFFENCE. IF YOU ARE IN THE PROCESS OF OR INTENDING TO BEGIN INSOLVENCY PROCEEDINGS, SUCH AS AN INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA) OR BANKRUPTCY AND DO NOT DISCLOSE THIS FACT AT THIS STAGE THEN YOU MAY ALSO BE GUILTY OF A CRIMINAL OFFENCE. IF YOU ARE PERSONALLY INSOLVENT AND IT IS REASONABLE TO ASSUME FROM YOUR CIRCUMSTANCES THAT THIS IS THE CASE; IF YOU DO NOT DISCLOSE THIS TO BEF THEN YOU MAY BE GUILTY OF A CRIMINAL OFFENCE. BEF’S POLICY IS TO PURSUE PROSECUTIONS IN SUCH SITUATIONS VIGOROUSLY. PLEASE SEEK LEGAL ADVICE BEFORE AGREEING.

I HEREBY AGREE TO BE BOUND BY THE TERMS & CONDITIONS OF BUSINESS & ENTERPRISE FINANCE LTD