Business Loans FAQs

What are Fair Finance and Fair Business Loans?

Since our establishment in 2005 Fair Finance has grown quickly and is now recognised as one of the most high impact community finance organisations in the UK, having also won a Big Society Award.

Through our offices across London we offer three core services:

  • Fair Business Loans from £5,000 to £50,000 to entrepreneurs unable to access mainstream finance for their businesses.
  • Fair Personal Loans of up to £3,000 at affordable rates to help people out of the clutches of loan sharks and high cost lenders.
  • Fair Money Advice to over‐indebted residents and housing association tenants facing eviction.

Through lending to businesses in local communities Fair Business Loans helps to bring employment and needed services to these communities, helping to build local economies and create wealth and prosperity.

We believe that:

  • Customers deserve a fair deal
  • Products and services should be simple and accessible
  • Financial advice should be honest and trustworthy
  • Credit should be affordable for all
  • Profits should be reinvested for the benefit of customers

We believe in Fair Finance

Do you fund start-ups or does my business have to have been trading for a certain amount of time?

We only progress applications where the business has been actively trading for a minimum of 24 months at the time of application. However, if your business has been trading for less than 24 months then we are happy to assist by directing you to organisations that we work with who do offer start up loans.

What geographical areas do you operate in?

We lend to businesses across the UK, thanks to our online application system and dedicated team of experienced Relationship Managers.

Is there any proposal we won’t finance due to the industry sector or the purpose of the loan?

Industry: The only industry sectors we will not consider are gambling, money services businesses, certain financial services businesses or residential/commercial property ventures. Otherwise, the overriding criteria we apply are that the purpose of the business must be legal and ethical. We would not finance any activity that we feel might bring us into disrepute.

Purpose: We don’t finance long-term on-going operating losses, significant research and development programs or rental arrears.

How much can I apply for?

We lend anywhere from £5,000 up to £50,000.

What is it likely to cost?

A typical loan of £15,000 repayable over 21 months with an annual interest rate of 49% and a 4% arrangement fee will have an APR of 55.7%. The total cost of the loan would be £21,665 which consists of the £15,000 loan, a £600 arrangement fee (4% of the loan amount) and £6,665 in interest. Repayments would be £1,003 per month in 21 monthly repayments.

What does APR mean?

APR stands for the Annual Percentage Rate of charge. You can use it to compare different credit and loan offers. The APR includes important factors such as:

  • the interest rate you must pay;
  • how you repay the loan; the length of the loan agreement (or term); frequency and timing of instalment payments; and amount of each payment;
  • certain fees associated with the loan.

What is the arrangement fee, how much will it be and when will I be expected to pay it?

The arrangement fee is only charged if a loan has been approved and you have accepted the loan. If a loan application is declined we will not charge you anything. The arrangement fee is 5% of the loan amount for new clients and 3% of the loan amount for existing clients. The arrangement fee is taken from the loan principal, prior to loan disbursement.

How quickly do I have to repay Fair Finance?

Repayment periods range from 3 months to 24 months for new clients. For existing clients, repayment period range from 3 months to 30 months. In both cases, the exact repayment length will depend on the purpose of the loan and the strength of the business.

I have no money of my own to invest, is this a problem?

It is helpful to us if you can show a personal investment into the business but it is not compulsory.

Do you require security?

If we lend you as an individual or as a sole trader then no security is required. If we lend to a partnership or limited company, then a personal guarantee will be required from one or more of the directors/owners. For higher value loans we may at times take charges on the assets of the business but this will vary on a case by case basis.

I have no credit history/ I have a bad credit history, is this a problem?

Not necessarily. Just be honest with us from the start - that is all we ask. While we will obtain information from credit reference agencies we do not make any decisions based purely on credit scores.

Is a relationship important?

Yes, absolutely. We focus on the development of trusting relationships and spend the time to get to know you and properly understand your business. We wish to be supporters of businesses rather than pure financiers.

How is interest calculated?

Interest is calculated on a reducing balance method: the principal gets reduced following each repayment period and the interest is calculated on the outstanding principal at the end of the period.

What if I want to repay earlier?

We are happy to accept ad-hoc repayments (in addition to scheduled ones) which will reduce your loan balance and, therefore, the total interest due over the period of the loan. There is no charge for this. If you wish to repay the entire loan early, you may also do this without charge.

How do I make repayments?

Monthly by direct debit. The repayment date is flexible around your specific requirements.

What happens if I don't meet my repayments?

We try to take an understanding approach to missing repayments on loans but consistent missed payments will eventually be progressed through to legal action if there is no other resolution. The best way is always to be upfront and honest about the situation you are in – Fair Finance is committed to finding a solution that works for us and the client.

How long does the loan process take?

  • Our loan process can take as little as 3 working days from your enquiry to the money being in your account, but the length of the process will largely depend on how quickly you can provide us with everything we need to undertake our assessment and make a decision.
  • The purpose of our loan process is for us to get to know you and your business well enough to ensure that we only provide loans to viable businesses in a structure that is affordable to each individual.
  • Our loan process works for you because it allows us to understand the unique circumstances of each individual and business and provide loans in a tailored manner that we believe will support the aspirations for you and your business.
  • It works for us, because it allows us to make fair and informed lending decisions where we get repaid and can recycle the loan repayments to lend to other entrepreneurs.

What if I wish to make a complaint?

Fair Finance aims to provide the highest possible standards of service to all our clients and organisations we work with. If at any time you are unhappy with any aspect of our service or would like to suggest ways we could improve this, please let us know. We hope that the relationship you have with Fair Finance will encourage you to discuss any such matter on an informal basis and allow us to attend to any concerns immediately.

If something has gone wrong with the level of service provided to you please bring this to our attention. We will record details of your complaint and then ensure that it is dealt with in a timely way. We aim to resolve complaints as quickly as possible but it may take up to eight weeks for us to send you a final response. We will do our best to resolve the complaint quickly and in most cases no further involvement is required. However, if you still remain dissatisfied you then have the right to refer the complaint to the Financial Ombudsman Service within six months of our final response.

Personal Loans FAQs

How do you make decisions?

We believe in offering a personalized service to our customers. Therefore, we conduct an informal one-to-one interview with you. At the interview, we go through your income and expenditure, assessing an affordable loan for you. We also look at things like your bank account management, and credit history, just to see how you've been managing your finances and any existing debts that you may have.

We at Fair Finance strive to provide you with the best possible loan solution.

What documents do I need to bring?

You will need to bring in 4 different documents.

  • Proof of name (passport or driving license)
  • Proof of address (tenancy agreement or utility bill)
  • Proof of income (payslips or benefit letters)
  • Bank statements (from the most recent 3 months)

If you do not have any of these documents, please give us a call and we can advise you on the alternative documents you can bring.

How many bank statements do I need to bring?

You must bring in your bank statements from the last 3 months.

If you do not have these, it is advised that you pop in to your local bank branch and ask for print outs of your recent transactions from the last 3 months.

In order to make your appointment as efficient as possible, it is crucial that you bring these documents with you.

Why do you conduct a credit search?

We conduct a credit search in order to fully understand your financial circumstances, and to see how you are managing your existing debts.

How long do I have to pay back the loan?

We aim to provide our customers with as much flexibility as possible.

Our loans are repayable over a period of 6 to 18 months.

What do I do if I haven’t completed 50% of my loan?

If you haven’t paid off the amount that is required to be eligible for a top up loan, it is advised that you continue to build your repayment history with us in order to be successful for a top up loan application.

Why has the top up loan process changed?

The top up loan process is much easier as existing clients do not need to visit the office twice. Clients only need to come to the office to sign the credit agreement which makes the process simpler and saves time.

When can I apply for a top up loan?

You can apply for a top up loan on two main conditions:

1. Providing you have made 6 months worth of good repayments.

2. You also need to have cleared 50% of your loan.

If you owe an outstanding balance, this will be deducted from your loan.

How do I apply for a Top up loan?

You will need to call us on 0208 988 0627 so that we can discuss if you are eligible for a top up loan.

If you are eligible we will send you an application form with a return address stamped envelope. You will need to return the completed application form, along with your recent bank statements from the last three months . On receipt of your application, we will aim to give you a decision within 24-48 hours.

If you have been approved, you must come back to the office to sign a credit agreement and pay your admin fee.

What if I'm running late for my appointment?

Don't panic! If you are going to be any later that 10 minutes, please give us a call on 02089880627 to reschedule your appointment. In order to ensure the best possible outcome for you, we need to spend atleast 20 minutes with you during your appointment. This means you will have to come in at the time allocated to you. If for any reason you cannot make it, please do give us a call on the above number.

Why do you want to know the purpose of the loan?

We’re responsible lenders so rather than waste your time we direct you to the right department. For example, it might be cheaper for you to receive debt advice instead of a loan, so we will direct you to the debt advice team to get advice. We will also advise you on the best option for you rather than putting you in more difficulty.

Why should I come to Fair Finance?

Fair Finance is a social enterprise. We aim to tackle financial exclusion. We build products for people with financial problems. We offer the cheapest price we can that is responsible and sustainable. We are actively transparent, clear and honest.

What are your opening hours?

Monday 9:00am to 5:30pm

Tuesday 9:00am to 5:30pm

Wednesday 9:00am to 5:30pm

Thursday 9:00am to 5:30pm

Friday 9:00am to 5.30pm

Closed Saturday and Sunday

Do I have to come in for an appointment to apply?

Yes, all loan applicants are required to attend a face-to-face interview with our advisers.

We conduct face-to-face interviews so that we can make the best decision when it comes to choosing the most affordable loan for you. Face to face interviews also help to build our relationships with our clients, ensuring that all decisions made are in your best interests. We don’t just offer loans, we also offer advice. If we know there is a better option for you that benefit you we will tell you.

Appointments can be made to suit you from Monday to Friday 9am to 5.30pm.

I am unemployed, can I still apply for a loan?

Yes, we lend to those who are working or are on benefits.

What if I have bad credit history? Can I still apply?

Yes you can, bad credit is not a problem. We will be searching your credit history on Experian, however we will not base our decision on your credit score. We will use the credit report to see that previous or existing debts have been or are being repaid in some form of arrangement.

I do not have photo ID, is this a problem?

Don't panic!

Speak to one of our friendly advisers today, and we'll let you know which alternative documents you can bring.

When do I get a decision?

All decisions are given within 24- 48 hours.

Why do I have to pay an administration fee?

We charge administrative fees to cover some of the costs in administering you’re loan. These include bank administrative and processing fees.

We charge 99% interest for our loans and 5% of the loan as an admin fee. The admin fee is only to be paid when you have been approved for the loan and should be brought to the office when signing the credit agreement.

The same applies to top up loan applicants; however the admin fee is reduced to 4%. If you keep up a good repayment history you will also receive a discount on the interest.

Why is your interest rate 99%?

We charge an interest rate to cover the costs of running our business. We do not make any profit from the interest that is charged, any profits made are re-invested in the business to improve our services to customers.

What if I wish to make a complaint?

Fair Finance aims to provide the highest possible standards of service to all our clients and organisations we work with. If at any time you are unhappy with any aspect of our service or would like to suggest ways we could improve this, please let us know. We hope that the relationship you have with Fair Finance will encourage you to discuss any such matter on an informal basis and allow us to attend to any concerns immediately.

If something has gone wrong with the level of service provided to you please bring this to our attention. We will record details of your complaint and then ensure that it is dealt with in a timely way. We aim to resolve complaints as quickly as possible but it may take up to eight weeks for us to send you a final response. We will do our best to resolve the complaint quickly and in most cases no further involvement is required. However, if you still remain dissatisfied you then have the right to refer the complaint to the Financial Ombudsman Service within six months of our final response.

How does the referral scheme work?

• Payments for successful referrals will be made at the following rate:

- 1st referral : £20

- 2nd & 3rd referral: £25 each

- 4th – 6th referral: £30 each

- 6th+ referral: £40 each

• To qualify for a payment you must be or have been a Fair Finance customer.

• The person you refer cannot be or have ever been a Fair Finance customer, or have ever applied for a loan at Fair Finance.

• The person you refer cannot be or have been employed by Fair Finance, a family member of current or previous employee or living at the same address as a current or previous employee.

• The person you refer must be successfully approved for and take out a loan at Fair Finance.

• The people you refer must be aged 18+ at the time they apply for a loan with Fair Finance.

• Payments will be made to you by BACS transfer. They will not be used by us towards repayment of a loan that you may have with Fair Finance.

• Do not advertise either by social media or by any other means.

• Do no present yourself as an agent or employee of Fair Finance.

• In the event of a breach of these terms and conditions Fair Finance reserves the right not to make any payments due and to restrict participation in the scheme without warning.

• Payments will not be made to you if you have a loan with Fair Finance whilst that loan is in arrears. Any payments will be made once any arrears have been repaid.

• Fair Finance reserves the right to change the terms of or stop this scheme at any time. If we do so we will make sure any payments earned are paid.

• You are responsible for paying any taxes owed on payments received as part of this scheme.