Borrower Frequently Asked Questions
Borrower Frequently Asked Questions
Simple Backing has tried to answer the most frequently asked questions about borrowing through our crowdfunding platform. Please contact us if you have any other questions not found below.
Simple Backing are a UK organisation bringing together lenders and borrowers in a transparent and fair environment.
Simple Backing is a trading name of Focus 2020 Limited. We are regulated by the Financial Conduct Authority.
We welcome applications from sole traders, partnerships, limited liability partnerships (LLPs), limited companies and individuals.
An applicant must be considered creditworthy as determined by the outcome of our due diligence process.
The minimum amount for businesses is £10,000 and for individuals is £25,000.
This depends upon what the borrower wishes to offer but consideration must be made as to what prospective lenders find reasonable. If the interest rate is too low, then the likelihood of investment may be low.
If your application passes the initial review then there is a non-refundable application fee of £295. This fee is payable in order to ensure that only serious requests are progressed; the vetting process each application goes through is rigorous and comes at a cost.
Please note that application fees are non-refundable regardless of the outcome of the assessment process.
If you are in any doubt as to the strength of your request and you feel the Application Fee is at risk then we suggest that you don’t apply.
Legal costs are also payable. These will be discussed with individual borrowers at the start of process.
If your application passes our assessment process and your loan request reaches the full pledge total, a platform fee of 5% of the loan amount is payable. Any amendment to this arrangement will be discussed and agreed with you prior to commencement of the project.
When you start your monthly repayments, included in the amount is a Payment Processing Fee of £1.50.
Each loan proposal and business has a different level of risk; some will be low risk and others of a higher risk. The differing levels of risk are reflected in the interest rate. Each loan request is assigned a Credit Rating Score Band (CRSB) that is used for Simple Backing’s internal purposes.
The CRSBs are:
In order to avoid applicants attempting to present information in such a way as to improve the CRSB we do not disclose how they are calculated. However, key factors include:
Assuming we have all the required information then you can expect contact from us within 3 working days of receipt of all the information.
The first contact will be via telephone and will be a ‘get to know you’ call to talk through your application.
If we are satisfied with the outcome of this call we will then arrange an appointment at a time suitable for all parties will be scheduled as quickly as possible for a face-to-face interview with a member of our team.
Assuming there are no queries raised, you can expect to be told of our decision within 14 working days. If successful, at that point your request is then passed on to our Lenders.
If your application is refused during any stage of the process we will advise you of the reasons for the refusal.
Registration to become a Lender is open to all but admittance to the Register is vetted. We request that all Lenders be able to pledge a minimum amount of £5,000 per loan request.
Unlike the majority of Peer-to-Peer lending platforms, which accept minimum bids of £25, the higher minimum amount means our Lender base tends to comprise more sophisticated investors.
Some basic information is provided on our website. The paperwork relating to your loan request is only available to registered Lenders.
In order for Lenders to make an informed decision on whether to lend to you or not, they will need as much information about your business as possible.
The following information about your business will be shared with Lenders as requested:
All the documentation relating to your Loan Application is available to all of our Lenders. Because loans are offered on a fixed interest rate, there is no bidding process, so it’s ‘first-come-first-served’. Once a loan is fully funded the funding process is closed.
You will not hear directly from our Lenders. Any questions they may have will be raised via us and we will contact you.
If during any part of the process additional, detrimental information comes to light then your application can be turned down and withdrawn.
Your request will be open for time period that has been agreed with you at the start of the process.
In the event that Lenders don’t fulfil the entire amount you are requesting then the loan will not be disbursed. In some circumstances, for example where we know that certain Lenders were not available at the time the request was made, we can extend the process at our discretion.
In certain circumstances we may allow an application to be reappraised if a project could, for example, be broken down into smaller, independent parts.
No, not really.
Typically, to ensure a high quality of applicants, the depth of the due diligence required necessitates that we follow a process and time scale. However, we do understand that in some instances a quicker decision is required in order to take advantage of a business opportunity with a limited time window and we will do our best to help you with this.
In order to outline your responsibilities and to protect both you and the Lenders you will be required to submit a Loan Application Form and, if your loan request is agreed, sign a Loan Agreement.
If the borrower is a Limited Company then all Company Directors will be required to sign a Personal Guarantee and a debenture will be taken over the assets of the company. If land or property is being pledged then a title deed or option will be required.
Any other form of security will also need to be formally pledged via a suitably drafted legal document.
In all cases security documentation will need to be signed with a Solicitor who will explain the nature of the documents you will be signing, the cost of which is met by you.
Once your loan request is fully funded, an email will be sent as confirmation. When you confirm by responding to the email (as per instructions supplied), you will be shown the loan contract. You should read through this carefully. If you decide to accept the loan, funds will be remitted to your account once security over the asset has been arranged.
It is up to you to set up a Standing Order (with the bank details we will supply) with the first repayment being made in accordance with the terms of your loan.
We expect all payments to be made on time to honour the commitment and faith Lenders have made to you. However, if payment has not been made, ideally we would like you to contact us first to advise us instead of our having to make you aware.
When speaking to us we would expect you to tell us when payment will be sent and we will advise the Lenders.
Missed payments entail additional work for all parties and as a result each missed payment will generate a Missed Payment Fee of £25 which will be charged to your loan. A further £25 will be charged on each attempt to collect payment or contact you.
If missed payments are not paid then we will pass your file for chasing on to a Debt Collection firm. Ultimately we will take the necessary steps to enforce the security you have provided so you need to be aware that the assets you have pledged could potentially be at risk. All costs in respect of following up missed payments or enforcing security will be your responsibility.
Unless otherwise agreed, your loan can be paid off early and will be typically subject to an early repayment fee equivalent to 1% of the outstanding balance. However, early repayment options will be considered on an individual loan basis.
You cannot partially pay down a loan or make overpayments.
Yes, businesses and individuals can take out more than one loan with Simple Backing.
We will usually require history of repayments from your previous loan before considering a new loan application. In some cases, we will consider another application based upon your profile and interaction with Simple Backing.
Additional funding requirements are treated on a case by case basis, and you will be required to submit a new loan application to be assessed by our credit assessment team.