Debbie Harmsworth, loans administration manager at Charity Bank, looks at five ways to help you avoid common pitfalls.
It's not unusual for a charity or social enterprise to encounter unexpected issues when seeking to take out a loan. Planning ahead and early communication with your bank and professional advisers can help you avoid delays.
1. Appoint professionals with relevant experience
It is good practice to think in advance about which professionals you might appoint (for example, solicitor, valuer, architect, or surveyor).
You should check that your advisers have relevant charity and property experience.
If you are not sure if the professional is suitable ask your bank or other charities. They may not be able make recommendations, but should be able to tell you if they have worked with them before.
Where property is being used as security, most banks will want to instruct a valuer. So, if you will be obtaining a valuation before you apply for a loan, ask the bank to instruct the valuer on your behalf – this can save both cost and time.
2. Plan around Board and Trustee availability
Check with your bank for anything that Trustees are required to approve. This way you can schedule these requirements around your Board meetings and when trustees are available to sign documents.
3. Send information direct to your bank where you can
Send information to your bank as soon as you can; piecemeal is fine. You do not always need to send all documents via your solicitor as some can be sent directly to your bank, but do let your solicitor know you if you intend to do this as they may need a copy for their records.
4. Keep talking
If you are considering any significant changes to your organisation (for example, changing its legal structure) please discuss these with the bank at an early stage to avoid possible delays.
If any of your key contacts are going to be away, let the bank know. Introduce the bank to an alternative contact and make sure they know what is happening.
5. Use the wealth of experience available to you
Your loans administrator and lending manager will have a wealth of experience and have probably come across your question or concern before. If it’s something new they will be able to find out the answer. It is always best to ask – they are here to help you.
In our experience preparation and communication are key. Stay in touch with your bank on a regular basis and to keep all parties up to date. Never be afraid to pick up the phone.