How It Works - Businesses/Borrowers

Who can apply for a loan?

You must be a UK business and have been trading for at least two years. CoFunder applies a stringent series of credit checks and searches to ensure that only the most viable and creditworthy businesses are listed on the platform.

Types of Loans

CoFunder facilitates loans of between £5,000 and £100,000 and must be for a period of between three and five years. Funders must bid for interest rates on their loan offers, and the final interest rate paid by borrowers is dependent on the aggregate amount of interest on all loans accepted.

The minimum term of a loan is three years and the maximum term is five years. The following fees are charged by CoFunder:

  • 2% drawdown fee of the loan amount
  • 1% per annum of the outstanding balance

The drawdown fee is deducted from the loan proceeds before being paid to you, while the 1% fee is charged as you make your repayments. There is no obligation to accept a loan offer from lenders.

Loan repayments are calculated at the moment the final loan is agreed and are repayable monthly from the first month following the start of the loan. Payments are to be made by direct debit.

The 45-day fundraising period

All funds raised through the CoFunder platform must be raised within a 45 day period. Once a loan has become fully funded at any point within the 45-day period the borrower has the option to end the bidding process at any time and accept the interest rates as they are. Or you can allow the process to continue for anytime up to the 45 days in the hope that further loans will be submitted at lower interest rates.

Borrower FAQs

Who am I borrowing from?

All lenders on CoFunder will have their identities checked and confirmed in line with the standard anti-fraud and anti-money laundering procedures before they are allowed to lend through the platform.

What information about my company is available on CoFunder?

The CoFunder platform allows for simple management of privacy settings and control over whether the information you provide is available publicly, or only to those who have registered as Funders.

What happens if my loan does not become fully funded within 45 days?

Loans must become fully funded in order to be completed through the CoFunder platform. Part-funded loans do not result in any agreement between lenders, borrowers or CoFunder and there will be no transfer of funds.

How do I accept a loan and how long do I have to do this?

Viewing all loan offers from Funders is a simple process and that is managed through the CoFunder platform. You will receive alerts when new loan offers are made. Loan offers must be accepted within 24 hours or they will expire.

Can my business have more than one loan?

No, not at this time. Businesses that do build up a good repayment history may be able to return for a second loan in future, but this will be on a case-by-case basis.

Can I repay early?

Yes, loans can be repaid early, for a fee. The interest accrued until the end of the month following when the loan is repaid is payable.

If a repayment is late, what happens?

If your payment is late, for whatever reason, please contact our payments team at payments@cofunder.net. More than 3 late payments will trigger the commencement of CoFunder’s debt recovery process.