Since they were announced at the last public meeting, our loan notes have been legally scrutinised and are finally ready for use.
Why Loan Notes?
Let's be clear on this: We're not offering loan funds; we're asking that you loan us money. The loan note is a document that states the terms on which we'll pay you back.
Loans are Different to Shares.
When you purchase shares you own a part of NWCBS Ltd and as such have the right to vote on certain issues. The aim of NWCBS is to purchase The Crown Inn, so in essence you'll own a part of the pub and will have a say on how it's run. Shares were priced at £50 to enable as many people as possible to take part in the project.
Loans are different. There is no right to vote and no ownership of any part of NWCBS. You essentially give up those rights for the increased confidence that you'll receive your money back at a certain time in the future. Additionally, the minimum loan amount is £3,000. You cannot loan us more than £10,000.
Do Loans Earn Interest?
We'd love to offer you interest but can't, for legal reasons. Firstly, we cannot offer anything that can be classed as 'investment activity' and secondly all profits must benefit the community, not individuals. Therefore these loans are offered at 0%, without security.
However, if you're a tax payer there's a couple of important points to note. Zero interest means zero Capital Gains Tax and due to our SITR advance assurance status you could claim 30% tax relief on the loan amount[^2].
What Will They Be Used For?
The buildings survey report has now been completed on the property. A separate post will follow to fill you in on the details. There are many areas of building improvement that we wish to work on after purchase and we hope to be able to fund some of those items via these loans. This approach should mean that we can begin to trade sooner than expected. For example, loan funds could be used to ensure that the cellar equipment is safe and hygienic for public use or that the heating system is serviced, maintained and stocked with oil. Not very exciting tasks but both necessary!
Where Do I Sign?
Email us at [email protected] with the amount you'd like to loan us, your full name and address and we'll send you the form with your details completed.
That's all for now. I know we've been quiet recently, that's simply because we are all currently going through paperwork that's frankly mind-boggling in detail. Our aim is still to complete the purchase by mid-November and posting here has had to take a lower priority while we concentrate our efforts on ensuring we're acting in the community's best interests. Please be patient, it won't be long now!
We took legal advice on this document. You should take legal advice too.
[2^]: The SITR minimum investment period is three years. ↩︎
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