How It Works - Funders

Becoming a Funder

You must meet the following criteria:

  • INDIVIDUALS - must be over 18 and a have valid passport or driving licence and have a UK bank account
  • LENDING COMPANIES - be registered with Companies House and have a UK bank account.

How much can I lend?

From £100 to £ 2,500 per individual company. We encourage diversified lending to reduce risks and maximise returns.

How do I lend?

It’s simple - browse the CoFunder website to identify which businesses you wish to lend to and make an offer to the ones you like. Your offer is entirely personalised in that you decide how much you want to lend and how much interest you want in return. Popular businesses will attract many offers so to have a better chance of your loan being accepted you will need to carefully balance the desired interest rate with the risk profile of the business.

Risk, Returns and Fees:

- Is my money safe and where is it held?

All funds that have yet to be loaned are held in a UK Bank Account (CoFunder Client) and can be withdrawn at any time. Funds that have been loaned to borrowers through the CoFunder platform will have been transferred into a bank account in the company name. All CoFunder client funds will be held in segregated accounts and seperate to CoFunder current accounts.

- How does CoFunder prevent fraud?

CoFunder runs a stringent series of credit checks and other searches on all borrower businesses and directors before allowing their profiles to go live on the website in order to verify identities and addresses. This ensures only the best and most creditworthy borrowers have access to the CoFunder platform.

- Fees

Fees are allocated on the basis of a 1% annual servicing fee for each loan, based on the total amount loaned. We will deduct this fee on a proportional basis in the first year of the loan. If no funds are loaned out there will have been no monetary cost to you.

- When do repayments begin?

One month following the successful close of a lending deal.

- How can I withdraw money from CoFunder?

Funds that have not been loaned out can be withdrawn from your CoFunder account/wallet at any time. In order to be able to withdraw any funds that have already been loaned out you must sell on your loan to another CoFunder lender, which you can after having held the loan for at least 6 months – the website will offer a market to complete this process easily.

- Tax

All returns made to lenders by CoFunder are gross of tax – we do not deduct tax at source. Therefore it is the lenders responsibility to declare their earnings through CoFunder to the relevant tax authorities (HMRC).

- If a repayment is late, what happens?

Only the best and most creditworthy borrowers have access to the CoFunder platform, due to the checks and processes they must go through in order to be listed. However, there is always the risk that some businesses will not be able to fully repay their loan. If business is late with 3 payments will trigger the commencement of CoFunder’s debt recovery process.

- What happens if we go out of business?

At CoFunder all loan contracts completed are directly between lenders and borrowers. These contracts would remain in place and be unaffected in the unlikely event that we were to fail or become insolvent, since the existence of those small businesses is not affected by CoFunder.