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?
Representative Example: Borrow £11,000 over 17 months. Total repayment including interest and fees is £15,749. 17 monthly instalments of £894.06 and a one off 5% administration fee of £550 (paid on signing). Interest (fixed) is 58.7% per year (3.85% per month) with a representative 69.9% APR.
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.
I am a trading business but not a Limited Company, can you support my business?
Due to the powerful combination of technology and our personalised approach to underwriting, Fair Business Loans are able to deal with almost every type of business set-up. If you are a LTD, LLP, PLC, Partnership or Sole trader the initial criteria is all the same. If it is set-up as a Charity or a CIC we can still support your business but we have an alternative, tailored approach. So in this instance please get in touch with us for further information.
What if I wish to make a complaint?
Please see our Complaints page here.
How can I apply?
You can apply either online or in one of our branches in London.
If you apply online, we are likely to give you a call to confirm some of the information you provided. We will also give you a call to go through the key terms of the loan contract if you are approved.
If you come to a branch, provided we have all the right information, you can complete the whole process in one go with the help of a friendly Personal Loans Officer.
You don’t have to come to a branch to complete the process. Accessing our fair and affordable loans is available wherever you live in the UK.
What documents do I need to bring?
You will need to bring in 4 different documents.
- Proof of identity (passport, birth certificate or driving license)
- Proof of address (tenancy agreement or utility bill)
- Proof of income (payslip, benefit letter, NI card/letter)
- Bank statements (from the most recent 3 months)
If you apply online and we manage to verify your identity and address electronically (via credit reference agencies), then the only documents required are the proof of income and bank statements.
The proof of income is only required for new clients.
How do you make a decision?
At Fair Personal Loans, we pride ourselves in not looking at people as “numbers”, and we don’t rely on a simple credit score to make a decision.
During the assessment, we go through your income and expenditure and what debt you may already have, to work out an affordable loan for you. We may also look at things like your bank account management and your credit history to see how you've been managing your finances.
I have defaults, CCJs or other issues with my credit file. Can I still get a loan?
We do lend to individuals who have CCJs and defaults. Don’t worry if you have a bad credit history. The most important thing for us is less the past and more the present, and in particular if you are up to date with most of your current commitments.
I have arrived recently in the UK and don’t have any credit history. Can I still get a loan?
Yes, we do lend to clients with no history in the UK. We will look at your current situation and figure out an affordable loan for you.
I receive benefits. Can I still get for a loan?
Yes. Many of our clients receive benefits. The most important factor for us is to make sure you are on top of your finances and can afford our loan.
How long does it take to get the money in my account?
If you apply online, we commit to get back to you with a decision within one working day.
If you come to a branch, you get a decision immediately at your appointment.
After the whole process is completed and all required documents have been provided, the loan contract can be signed. Money is deposited in your account after contract signing within one working day.
In total, if we get the all the necessary documents, the process typically takes 24 to 48 hours.
Do I have to pay an administration fee?
Only if you are approved and you take a loan, then you need to pay an administration fee. This fee is deducted from the loan amount, so you don’t have to pay it before getting the loan.
We charge administrative fees to cover some of the costs in administering you’re loan. These include bank administrative and processing fees.
A fee of 6% of the loan amount applies for new clients, and 4% of the loan amount for all existing client.
Why is your interest rate 149%?
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.
Our interest rate and APR are competitive compared to other loan providers who provide loans with APRs above 1000%. However, our loans are more expensive than a loan from a bank or a credit union. Always shop around to find what is best for you!
How do I apply for a Top up loan?
To be eligible, you need to have repaid at least 50% of the total repayable loan amount, and be up to date with your loan repayments. You can give us a call on 0208 988 0627 to know about your balance and whether you are eligible or not.
If you are eligible you can make the application either online or in branch.
What if I wish to make a complaint?
Please see our complaints page here