These Terms and Conditions relate to all loans offered by North London Credit Union Limited (hereafter called ‘loans’) for business purposes. They should be read with the Membership Terms and Conditions and with your Loan Agreement.
- Credit unions work by lending the money that members are saving with us. The interest that we charge on loans helps to pay our running costs and the cost of making the loan available.
- Credit unions are owned by their members and any surplus made by the end of the year is distributed to savers.
- North London Credit Union (NLCU) was incorporated in 1994 for the express purpose of improving the availability of finance for people running businesses.
- Our business loans are structured as personal loans intended for you to use towards your business. This means that you are individually responsible for repaying the money lent. It is very important that before you borrow money you think about whether you really need the loan and whether you will be able to repay it.
- We lend responsibly and aim to provide a product that is affordable for you, based on the information you have provided to us.
- We will give you information about our products and services and how they work in a clear and understandable way, so that you can decide what’s best for you and your needs. We will never pressure you into taking credit. We are not able to offer any general advice regarding credit or the merits of the different types of credit, nor can we recommend any particular provider. We suggest seeking independent financial advice if required.
- Like most lenders, we use a credit reference agency search to help us make decisions about applications. Applications for credit which are declined can be viewed by other potential lenders and may negatively affect future application for credit. You should therefore be sure that you meet our eligibility criteria before submitting your application. We encourage applicants to be open about their circumstances, as failure to do so may lead to applications being refused and loan offers being withdrawn.
- To receive a loan from North London Credit Union, you must be a member. Information on our criteria can be found on our website.
- You must be over 18 years to enter into an agreement for credit.
- If you do not otherwise qualify for NLCU membership, you may join London Enterprise Club for a one-off fee, payable on draw-down of £50.
- Under NLCU Rules you must also hold a Membership Account with a minimum balance of £5 during the length of your membership.
- You must be a UK resident to get a personal loan and your business must be based in the UK. If you are not a permanent resident, your eligibility to remain in the UK must extend beyond the term of the loan by a minimum of six months. We may request proof of your residency status and eligibility to run a business in the UK.
- Your business must have been trading for over two years. If your business has been trading for under two years, you may wish to consider a Start Up Loan from our partners at Financing Enterprise (fsue.co.uk).
- You must have a regular income to be eligible for a loan. For a business-purpose loan, this would normally be from your earnings as a self-employed person or drawings from your business, but we may also take into account earnings from employment, a pension, welfare benefits or other legitimate source. Only the income that you are able to show satisfactory evidence for can be used in respect of your application.
- We understand that your income may fluctuate or vary according to the season and we may ask for additional proof of income to get a fuller picture.
- Your business must have a business bank account already open (see 22. and 26.).
- We will ask for details of the purpose of your loan and reserve the right to request proof of the loan purpose.
- We can provide finance for any purpose related to developing a sound business, with the following exclusions:
- Investments, including buying stocks and shares;
- Purchasing property;
- Repaying CCJs (County Court Judgments);
- Exclusive purchase of computers and associated equipment;
- Purchase of a vehicle (unless an integral part of the business);
- Funding for trips abroad;
- Funding for research, product development or some forms of training;
- Political purposes or any activity that we judge may bring NLCU into disrepute.
- Loan applications can normally be made six months apart, regardless of the loan decision. We will not usually advance further funds until we have received six months’ satisfactory payments on an existing loan. No further funds will be advanced where payments are not fully up-to-date.
- Eligible applications are assessed against our credit policy and decisions to lend are made entirely at our discretion.
How and when will we give you the loan?
- When you have signed and returned the agreement, we will sign it. The agreement will start on that day and will end when you have repaid everything you owe us.
- We will pay the loan into a personal current account (i.e. not your business account), which has been verified as belonging to you.
- This will usually be no more than five working days after the start date or the specific date you asked for.
- Loan offers are valid for a period of three months from the date of the offer, unless otherwise agreed at the time of the application.
How must you repay the loan?
- You can cancel the loan within 14 days of disbursement, provided that all transferred money is returned to the credit union (plus interest accrued to that point).
- Loan repayments must be made monthly, via direct debit. The first repayment must come from a personal bank account, after which you can pay from your business account if you wish.
- If payments by direct debit are not maintained, this can prejudice any future loan applications.
- You must make the monthly repayments set out in your agreement. If a repayment date is a non-working day we will collect it on the next working day.
What is the cost of the loan?
- We charge a fixed rate of interest which we calculate from the point that the loan is disbursed. The total amount payable by you is the sum of interest and the amount borrowed. For these purposes, we assume we provide the loan one month before the first repayment date.
- Interest on loans is charged on the reducing balance of the loan, and the rate will be fixed for the whole repayment period.
- We will charge a lending fee, covering the additional cost of processing loans for business purposes. This will amount to 1% of the sum lent, with a minimum of £50.
- We will not charge commission or early redemption fees of any kind.
- If you repay part of the loan early, you can choose to reschedule your remaining monthly repayments (meaning lower monthly repayments) or to keep them at the same amount (and repay the loan more quickly). Please contact us if you would like to discuss your options.
Save as You Borrow
- If you are borrowing for business purposes, you do not have to save with us, however you may chose to do so if you wish.
- Savings deposits can be made at the same time as loan repayments and are placed in a separate savings account which will be freely available to the borrower.
Guidance if you miss a repayment or we have other concerns
- Please let us know if your circumstances change, particularly if what’s happened is likely to cause you difficulties in managing your account or financial problems.
- Get in touch as soon as possible if you think that you won’t be able to keep up with your repayments. The sooner you do this, the more likely it is we’ll be able to find a way to help you.
- There may be severe consequences if:
- You do not make repayments on time; or
- We find that any information you provided as part of your loan application was materially incorrect or misleading; or
- You are declared bankrupt or have similar proceedings taken against you; or
- We reasonably suspect any fraud or other criminal activity in connection with this agreement and/or any other facility or account that you have with us.
- In any of these cases, we can:
- Demand immediate repayment of the loan;
- Disclose information about you and the conduct of your loan to licensed credit reference agencies (which may make it more difficult for you to borrow in future);
- Bring legal action to recover the loan (which could include asking a court to order that, if a property you own is sold for any reason, some of the sale proceeds are used to repay this loan); and
- Require you to pay our reasonable costs and expenses for taking action to obtain payment, including legal costs;
- We will give you advance notice and (unless the problem cannot be fixed) the opportunity to fix the problem before taking any of these steps.
- If we choose not to enforce our rights under this agreement at any time, we may enforce them at a later date instead.
- You will be liable for any and all costs we incur in recovering sums due under the Agreement.
- In the event of default we reserve the right to pass information held about the defaulting member to third parties (see 54.).
- Failure by the lender to follow any or all of the procedures set out herein shall not invalidate the remaining terms.
- A Loan Agreement is a legally binding Agreement; sign it only if you wish to be bound by its terms. If you do not understand any part of the Agreement you should take independent legal advice.
- You must let us know of any changes to your contact details as soon as you can (including address, phone number and email address).
- Statements for your accounts with NLCU are issued annually. Additional statements can be requested at any time. There may be a small charge to cover the cost of additional postal statements.
- We have the right to offset any amounts you deposit to any of the accounts you hold with us against any amounts you owe to us. This means that we have the right to (for example) to move money from your savings account to pay loan arrears, or other amounts which are due.
- A member of NLCU aged 18 years or over can receive a copy of the annual Report and Accounts (on request) and will invited to attend the Annual General Meeting as a voting member.
- If you wish to make a complaint about this account or North London Credit Union, you should address it to: The Complaints Officer, North London Credit Union, 3 George Mews, Enfield, Middlesex, EN2 6JA. Complaints can be made in person, by post, or by email. A copy of our Complaints Procedure may be found on our website.
- We are a member of the Financial Ombudsman Service.
- For more information about NLCU’s loans or other products please visit our website (northlondoncreditunion.org), contact us on 020 8366 8244 or email email@example.com.
- The Borrower authorises the Lender to search, link and/or record information at Credit Reference Agencies about them, and/or anyone else referred to by them, and agrees to be bound by the lender’s policy on these matters as set out in “A condensed guide to the use of your personal information by ourselves and at Credit Reference and Fraud Prevention Agencies” which is available from our website or on request.
Changes in Terms and Conditions
- We reserve the right to adapt or amend these Terms and Conditions.
North London Credit Union Limited trades from its registered office at 3 George Mews, Enfield, Middlesex, EN2 6JA.
Its telephone number is 020 8366 8244, and its email address for general correspondence and enquiries is firstname.lastname@example.org.
North London Credit Union is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, registration 213809.
North London Credit Union is approved by HM Revenue & Customs (HMRC) as a provider of Cash Individual Savings Accounts, under the reference Z1743.
North London Credit Union is covered by the Financial Services Compensation Scheme (FSCS). The FSCS will pay compensation to depositors if a credit union is unable to meet its financial obligations. Most depositors – including most individuals and small businesses – are covered by the scheme.
In respect of deposits, an eligible depositor is entitled to claim up to £85,000. For joint accounts, each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £85,000 each (making a total of £170,000). The £85,000 limit relates to the combined amount in all the eligible depositor’s accounts with the credit union, including their share of any joint account, and not to each separate account.
For further information about the scheme (including the amounts covered and eligibility to claim), please refer to the FSCS through their website (www.fscs.org.uk) or call them on 0800 678 1100.