Loans
Zopa-PRIME Olderpreneur Loan
To help people aged over 50 get access to funds to become self-employed or set up their own business, PRIME has arranged an innovative loan scheme together with Zopa Ltd and the charitable arm of Bank of America. It does have funds to lend despite the credit crunch - but the application process is highly competitive. So this scheme is not for everyone, but only those with a strong viable business proposition.
Features
- It’s a personal loan of up to £15,000.
- The interest rate is determined at the time of the loan is offered to you, but typically it will be between four and 15 per cent depending on what lenders think of your proposition.
- There is no upfront fee. You are only charged a one-off setup fee of £118.50 by Zopa, which is added to the loan amount.
- The repayment period can be from one to three years.
But remember
- You are personally responsible for repaying the loan - that’s you, not the business if you have incorporated it separately.
- Your contract is with Zopa lenders, not PRIME or any of the other sponsors.
Are you eligible?
Don’t go further unless you can answer “yes, that’s true” to the following questions.
- I am aged 50 or more
- I am a UK resident and have been for at least the last three years
- I have a UK bank account in my name at my current address
- I have not taken out another loan in the last four months
- I have a strong and viable business plan
- I am currently unemployed/retired
- I have been self employed for less than one year
Unfortunately if you can’t answer positively this scheme won’t be able to help. The Zopa-PRIME loan scheme is not the complete answer to the problem of securing start-up finance. But it does allow olderpreneurs with more lender-friendly propositions to put their case in front of Zopa lenders.
What about a bad credit history? Contact us to discuss further if you think this might be the only problem with an otherwise strong application. email prime@ace.org.uk Freephone 0800 783 1904.
Under this scheme PRIME will only give its endorsement to the best ventures it sees each month.
Code of practice
Please read this important document.
prime-code-of-practice-for-loan-funds
Exclusions
We are unable to accept applications in the following areas:
1. Dealing in land, commodities, futures or the instruments of any holding company that are traded on a recognised stock exchange or market for dealing in securities.
2. Banking, insurance, money lending, debt factoring, hire purchase financing and other financial activities.
3. Leasing .
4. Companies principally trading or investing funds overseas.
5. Money transfer agencies.
6. To repay existing borrowing, meet historic working capital requirements or to fund continuation of an adverse trading history.
7. To repay prior investments in the business, including any directors’ accounts.
8. For the acquisition, construction or development of residential property (directly or indirectly).
9. Non-residential property purchase, development, acquisition, or construction.10.Purchase of computers and associated equipment (Unless an integral part of the business)
11. Purchase of a vehicle (unless an integral part of the business)
12. Funding for trips abroad, research, product or some forms of training
Moral Exclusions
Approval of loans and finance will not be provided for political purposes, any illegal activity, or any activity which may bring PRIME into disrepute e.g. pornography, gambling etc.
How to apply
We’ll send you a full application pack by post which contains more details and the relevant forms. If you have been in contact with PRIME before you probably don’t need the full startup pack again, so don’t bother filling them all in again.
If you have never been in contact with PRIME before you can get the loan form plus a pack of other helpful free business start-up material by filling in our standard request form.
More details about the scheme
PRIME has developed this loan scheme together with Zopa Ltd and the charitable arm of Bank of America specifically for 50-plus olderpreneurs who are finding it difficult to raise money directly from the banks.
Why Zopa?
Zopa Ltd (or www.zopa.co.uk) is the leading online market place for person-to-person lending in the UK. It has pioneered the concept since its launch in 2005. Zopa is a place where people meet on the Internet to lend and borrow. Individuals borrow from other members of the public online, rather than from a bank.
This means your plan is seen by a lot of small lenders - who are just ordinary people with money to invest, and not by the sort of big institutional lenders currently paralysed by the credit crunch.
Why Bank of America?
PRIME now has a strategic corporate partnership with Bank of America Charitable Foundation, which means we are one of the main charities it supports in the UK. Funded by Bank of America, the Foundation gave more than US$200 million in 2007 worldwide, making the bank the most generous financial institution in the world.
PRIME’s role
PRIME is the Prince’s Intiative for Mature Enterprise, a charity registered in England and Wales. It does not itself lend money. PRIME’s role is to make sure your business plan has been thoroughly vetted so we can recommend it to Zopa lenders.
What application involves
Your role is come up with a convincing business proposition, and then submit it with the accompanying documentation to PRIME.
The main thing we need from you is a business plan that covers all the major points with no glaring omissions. In particular your plan needs to explain how you are going to make enough money to both pay yourself enough to live on and pay back the loan. There’s more guidance about how to write a business plan here.
This sort of planning is widely believed to increase the chances of business success, so it’s a good thing to do anyway even if you don’t need a loan.
It’s competitive
Note that the whole Zopa-PRIME Olderpreneur loan scheme is highly competitive. PRIME is unlikely to endorse more than 15 applications a month, so your plan needs to be one of the best we have seen before we will allow it to go through to the next stage.
As a charity we have no desire to encourage people to start in business if they are likely to later fail. So if we believe your proposition looks weak or unsustainable we simply won’t endorse it.
What happens on the Zopa web site
But let’s assume you win PRIME’s endorsement. What this does is increase your chances of success at the next stage, which is also highly competitive - when you put your business idea in front of the lenders.
You do this by putting up a short pitch describing who you are and what you want the loan for on the Zopa website. You can see examples here. Zopa’s lenders stand to lose money if you don’t pay them back, so may well scrutinise your proposition closely.
Zopa’s lenders individually decide whether they want to risk lending to you - and at what rate. You can then decide whether to accept or reject their offers. The way this kind of listing works is described in more detail on the Zopa site.
Why Zopa lenders should take a chance on you
If you have come via the Zopa-PRIME Olderpreneur scheme lenders will know that you have been endorsed by PRIME, and this implies two things that should make them more likely to lend.
Firstly they’ll know that PRIME has vetted your plan and have recommended it to them as one of the best we have seen. And secondly they’ll know that the risk to them in lending to you has been reduced is a guarantee that we are offering to lenders that covers part of the money.
The lenders are still taking a risk on you making a success of your business and paying back the loan - and it’s their own personal money that’s at stake. There are obvious risks attached to all new business ventures - and especially ones started by people often new to small business, in the midst of a recession! So you’ve got your work cut out convincing them.
This is why the Zopa-PRIME Olderpreneur scheme offers lenders an extra inducement to consider your proposition. PRIME will decide whether to guarantee 50 percent or 70 percent of the money you borrow from Zopa lenders as a PRIME-endorsed applicant will be guaranteed. The individual lenders are still risking their own money, but half as much as they would be doing if you lacked the PRIME endorsement.
The guarantee money is held in the Prince of Wales Enterprise Endowment. The Bank of America Charitable Foundation made the first contribution to this fund, making the whole scheme possible.
See also
How to do a business plan.
Loan application guidance notes.
You are very welcome to contact PRIME direct on freephone number 0800 783 1904 (open 10am to 4pm Monday to Friday).
The first 100 successful PRIME sponsored loan applicants will receive a FREE copy of the Essential Business Guide.
The only business book ever to win a Plain English Award and Business Book of the Year.
Print this item