Alternative Funding for the Sector

Jon FieldRelationship Manager

A Funding Puzzle ??

A Bit About Me … • Regional Manager in Wales for Unity Trust Bank; a socially responsible Bank which specialises in the provision of banking services to the charity, voluntary and not for profit sectors. • Having joined Unity in July 2008, I previously spent 17 years working for Barclays Commercial Banking in a variety of roles including corporate business development and underwriting. • My role with Unity involves full client relationship management in addition to scouring new business opportunities for the bank.

Unity Trust Bank• Established nearly 30 years ago

• We are the specialist bank for social enterprises, charities and trade unions

• We are proud to deliver a range of banking solutions and a quality of service that sets us apart from the mainstream banks

• We look to achieve growth by being socially focused, customer centred and commercially driven

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WCVA & Unity Loan Scheme• To assist organisations develop and/or refurbish their premises from which to deliver enhanced services towards the common good.

• Loans considered from £250k to £5m

• Terms available from 3 years to 30 years

• Typical margin: Typically Base** +2.25% (minimum 4% p.a.).

• Required security would normally be a First Legal Charge over the property, with 1.5% Arrangement Fee

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Case Study:

Unity loan through the WCVA scheme, helped Valley Kids develop a hub for disadvantaged local children who want to train in music and media.

“We already banked with Unity and know that they’re much easier to deal with than a normal bank, but we were pleasantly surprised by the interest rates. This loan saves us about £12,000 a year and will allow our funds to stretch even further. Unity works for us and we would recommend them to other organisations.”

For more information on the loan scheme visit www.unity.co.uk/wcva

Overdraft Facilities• To assist normal revenue expenditure and/or cash flow requirements

• Overdrafts can be considered for amounts up to £1m secured, on a max LTV of 70%. Normally a max of £50k for unsecured

• Terms are for 12 months and can be renewed subject to need and a fresh application

• Typical margin over Bank Base Rate: +2.75% (minimum 4% p.a.) - Unsecured. Typical margin over Bank Base Rate: +2.75% (minimum 4% p.a.) - Secured

• Arrangement Fee of 1.5% + Legal & Valuation Costs

Grant Bridging Facilities• Provides short term cash flow support up to £50k pending receipt of specific confirmed grant funding

• Maximum Term of 3 months, although in exceptional cases this may be extended for a further 3 months, subject to completion of a fresh application form

• Typical margin over Bank Base Rate: +3% (minimum 4% p.a.). NB – Base Rate is currently 0.50%

• An Unsecured Facility, however Unity would typically want to provide the main banking relationship

• Fees are typically 1.5% of the facility limit

Property Development Funding• Property Development Funding is a funding package designed to assist organisations with the redevelopment of existing premises or the construction of new premises.

• The loan is paid out at different stages of construction, in line with your needs, which often includes covering grant claims and VAT rebates. This also ensures that costs to your organisation are minimised.

• There is also an option for interest to be rolled up during the construction phase where no interest and no loan repayments are due until the property is completed.

Why Would You Borrow ?• The need to compete in a new environment

• A need to bridge a delay in a grant not yet received

• To assist the start up of a new project or expansion of existing services into new areas

• To assist seasonal income fluctuations of the business

Information Required • Mini CV's for senior and key staff and trustees /directors

• Business plan (if available)

• Latest Management accounts

• Budget

• Financial Forecasts incorporating Cashflow

• Development cashflow

• Audited Annual Accounts for Previous 3 Years

• Annual Report (if available)

Benefits of Loan Financing• Can get a project off the ground and make things

happen now

• Can fill a gap in funding a project

• Can encourage long term planning, due to the long term nature of loans

• Utilisation of assets that can generate additional revenue

Considerations• Short or long term – cash flow/capital

• Secured or unsecured – buildings, contract/grants

• Be prepared – gather the information required

• Good internal finance systems will be needed to manage loan financing

• For development projects professional advice will be needed

Questions?

 

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Contact Details:

Jon FieldRelationship ManagerPO Box 401CardiffCF11 1LE

M: 07885 843889E: jon.field@unity.co.uk