2. When’s the right time to talk to lenders?

At CAF Bank, we encourage potential borrowers to speak to us at an early stage in considering sources of funding of their project. This initial conversation helps provide rough parameters on the size and term of a loan, the minimum criteria required (i.e. three years of trading, a minimum loan of £150,000, etc.), as well as the conditions or security that need to be in place. This preliminary conversation is crucial in helping you understand what we look for and helps us understand your project and needs before you progress too far into the process.

Tap into our team’s expertise before you formally apply for a loan.

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3. What information will lenders expect you to provide?

Once you have a clear idea of what you’d be asking for and have decided to apply for a loan, you will need to provide financial documents including three years’ audited accounts, management accounts for the current financial year, and a forecast for at least the next two full years. This is also information that Trustees will need.

Lenders will also need to know the costs of the project, how you’ll use the money and how you plan to pay back the loan. If relevant to your situation, a business plan with projections of income and expenditure, backed up by financial statements, market research or statistics will be really useful here.

Ensure your plan has factored in potential risks and considers ways in which your organisation can respond to make sure your finances stay on track. Lenders will want to go over this in detail, to ensure you’re not being too optimistic or cutting things too fine.

Think too about the additional costs such as quality legal advice, surveyors, VAT and other expenditure. Read our free guides to learn more about the legal and VAT aspects.

Once you have all these documents to hand, the CAF Bank team can take your application to the next stage.

4. Do you have a plan B?

It’s possible that your financial situation could change over the term of your loan. Is your plan resilient enough?

If your levels of income change or costs rise, could you still repay the loan? If you’re planning to build or refurbish a building and issues arise, will you have enough contingency?

Our lending experts can help with scenario planning to make sure you’re prepared for the unexpected and can adapt your plan to changing conditions with confidence.

5. Does your team have the right skills for the project?

Lenders are looking for strong internal processes, management and governance. Check you have the right mix of project management and financial skills within your team.

If you identify any gaps or weaknesses in your team’s skillsets, make sure your plan highlights any additional resources you will bring in. This may mean contracted project managers, finance experts or legal professionals. Of course, these costs will need to be factored into your plan.

6. Are your project goals and timelines realistic?

Being ambitious is great, but being too ambitious can end up being costly and disheartening. Make sure the scope and scale of your project aligns with what you can realistically achieve. Do you have the ability to adjust if unexpected circumstances occur? It helps to explain both your overall goal and its forecast impact, as well as the immediate project outputs.

7. Does the lender share your values?

Having the same values as your lender is important when it comes down to making key decisions for your organisation. Find a lending partner that truly understands the unique challenges charities and social enterprises face, so you can get the right support when you need it most.

At CAF Bank, we aim to meet every borrower in person to better understand the impact of the projects we help finance, so that we can get behind our clients’ goals and make them our own. From our tailored approaches to expert guidance, everything we do is geared towards helping our clients support the people who turn to them.

Secured loans up to 25 years

CAF Bank can provide lending of between £150,000 and £10m to achieve your charity’s goals.

CAF Bank loans

Ready to start the conversation?

Our CAF Bank experts take the time to get to know you and your project. Then, if they think loan finance could be right for you, they will ask you to send some more information.

Get in touch to set-up an initial chat