A Chair’s perspective: using loan finance to bring the local community together

Jan 13, 2020

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The Causeway Hall sits at the heart of Chiddingstone Causeway and hosts a wide range of events and activities. It was rebuilt with the help of a £150,000 loan from Charity Bank.

As Dennis Ward, Trustee & Chair of the Redevelopment Committee, explains, without the loan the village would probably still be fundraising.

Why did you need to build a new hall?

We’re a relatively small community and need a place for people to get together. Without a meeting place, people can become divorced from their neighbours. The old hall was a tin tabernacle – basically a prefabricated building made from corrugated iron. It had reached the end of its useful life so needed pulling down and replacing.

Why did you decide to take out a loan to build the hall?

We’d raised around £500,000 through community events, fundraising, grants and so on, but building costs were rising. It had got to the point where the cost of the building was increasing faster than we could raise money. It made sense to take out a loan to cover our shortfall. At least then we could agree a price, know where we stood and get on with the project. If we hadn’t taken out the loan, we’d probably still be trying to raise the money.

Why did you choose Charity Bank for your loan?

We’re not a company, so we needed a bank that would offer us an unsecured loan. Those aren’t easy to come by. We’re based near Charity Bank’s offices and one of the committee members knew someone who worked there, so we decided to approach them.

How did you weigh up the risks and benefits of taking out a loan?

We discussed it at length, did our cash flow projections and the sums worked out. We were confident we could make at least the minimum monthly repayments.

How did you find the process of applying for the loan?

It wasn’t overly complicated. Our treasurer is a chartered accountant, which probably helped, but the process seemed quite straightforward. There was a lot of paperwork to start with, but you’d expect that with any bank. Once we’d taken the loan out, we still needed to provide cash flow figures, budgets etc on a regular basis. That’s eased off a bit now though, as we’ve overpaid and we’re keeping our noses clean!

What worked particularly well?

We took out a loan for 25 years, but have been allowed to overpay each month by as much as we want to in order to reduce the term of the loan and save interest. If we took 25 years to pay it off, half of the committee would be dead! We’ve raised more money through donations and hiring the hall out, so we’ve been able to pay back £68,000 already. The business support manager was very helpful, as was the director who became our main point of contact.

What advice would you have for other village hall committees who are thinking of taking out a loan?

Get organised! If you’re not properly organised you won’t get the loan. We provided everything Charity Bank needed. A bank has every right to ask for your figures and you need to be confident they hold up.

From our point of view, taking out a loan has allowed us to get the job done, without tearing our hair out!

Has the new hall attracted more people to it?

Oh it’s definitely more popular. We don’t keep track of the exact numbers, but we probably have 4,000 people a year using it now. The old one smelled of rot and leaked, so we had the W.I. in and the odd party, but not many people wanted to use it. Now we have everything from table tennis, drama groups and baby sign language classes to a jazz club. It’s used for lots of children’s and adult’s parties and we organise fundraising activities such as quizzes and so on. It’s made a vast difference to our community and will be here for another two hundred years or so!

Find out more about the loan in our Causeway Hall case study.

Road to Growth