info@melding.co.uk
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Entrepreneurs' FAQS
Who is Melding Limited?
Melding Ltd was created by a group of passionate individuals who wanted to help as many businesses and individuals achieve their entrepreneurial goals and aspirations, via accessing commercial funding that was previously not available to them before. We are dedicated to providing a professional and efficient service to both our Lenders and Borrowers.
Melding Ltd (No. 8717078) and Melding Security Trustee Company Ltd (No. 9281426) are registered in England and Wales. Our trading address is Melding Limited, Kemp House, 152 City Road, London EC1V 2NX. Our registered office is 145-157 St. John Street London EC1V 4PW.
How is Melding Limited Regulated?
Melding Ltd is regulated by the Financial Conduct Authority (FCA) 661800 and is registered with the Office of the Information Commissioner, Reg no. A1023157. Melding Ltd is also regulated by the Anti Money Laundering Act of 2007.
What Type of Businesses Can Apply for a Loan?
We welcome applications from sole traders, partnerships. Limited Liability Partnerships (LLPs) and Limited Companies. In certain circumstances (for example, a proven track record or experience in the industry), we will accept applications for start-up projects but typically we expect applicants to have been trading for at least 12 months.
Any business applying must be based and operating in the UK, and considered to be creditworthy as determined by the outcome of our extensive due diligence process.
In certain circumstances, where clear evidence and reasons can be presented, we will accept applications from businesses or owners who have had a limited number of CCJs in the past. However, all CCJs must have been satisfied with none outstanding.
What is the Minimum and Maximum Amount I Can Borrow on Each Loan Request?
The minimum amount is £50,000. There is no maximum amount that you can request in your loan application. As a typical rule of thumb, any Loan application will be expected to have a maximum loan to value ratio between 75 to 80% of any security being offered.
What Interest Rate Will We Be Charged?
The interest rate you will be charged depends on a variety of factors. If your application is accepted for submission to be reviewed by the Credit Assessment Team you will be assigned a Credit Rating Score Band (CRSB).
Each of the four CRSB’ has a fixed interest rate – the higher the perceived risk, the higher the interest rate.
The interest rates applicable to each CRSB will be periodically changed to reflect current and expected market conditions and Lender expectations. The current interest rate bands are detailed here (link to page).
What Fees Will I Pay?
If your application passes the initial review then there is a non-refundable Application Fee of £295. This fee is payable in order to ensure that only serious businesses apply; the vetting process each application goes through is rigorous and comes at a cost.
If your need for funds is of an urgent nature, for example, to take advantage of a time-sensitive business opportunity, then you can elect to follow the Fast Track process for which the Application Fee is £695.
Please note that Application Fees are non-refundable regardless of the outcome of the Credit Assessment process.
Whilst we wish to put forward as many applications as we can to the Credit Assessment Team there will be instances where applications are not strong enough so we would ask you to take a long hard look at your request before formally submitting it to us.
If you are in any doubt as to the strength of your request and you feel the Application Fee is at risk then we suggest that you don’t apply.
Upon acceptance of a loan an Arrangement Fee is payable and the rates are displayed here (link to page).
When you start your monthly repayments, included in the amount is a Payment Processing Fee of £1.50.
How Do You Arrive at the Credit Rating Score Band?
Each loan proposal and business has a different level of risk; some will be low risk and others of a higher risk. The differing levels of risk are reflected in the interest rate and so each loan request is assigned a risk band and this is done via a Credit Rating Score Band (CRSB).
The CRSBs are:
A – Low Risk
B – Medium Risk
C – Average Risk
D – High Risk
In order to avoid applicants attempting to present information in such a way as to improve the CRSB we do not disclose how they are calculated. However, key factors include:
• Age of the business
• Director’s/owner’s experience
• Financial performance from Annual Accounts and Management Information
• The business/directors/owner’s external credit rating and past credit history
• Type of security (if any) offered and the valuation
• The industry sector
If Our Request Passes the First Review When Can We Expect to Be Called for the Interview?
Assuming we have all the required information then you can expect contact from us within 2 days of receipt of all the information. An appointment at a time suitable for all parties will be scheduled as quickly as possible for a face-to-face interview.
Once we are satisfied that your request is suitable to place in front of our Lenders we will submit your Application for formal review by our Credit Assessment Team.
How Quickly Will We Hear the Final Decision?
Assuming there are no queries raised by the Credit Assessment Team, you can expect to be told of our decision within two working days. At that point your request is then passed on to our Lenders for their review and acceptance and level of funding.
Who Are Your Lenders?
Registration to become a Registered Lender is open to all but admittance to the Register is strictly vetted. We request that all Lenders be able to pledge a minimum amount of £50,000 per loan request.
Unlike the majority of Peer-to-Peer lending platforms, which accept minimum bids of £25, the higher minimum amount means our Lender base tends to be of a higher quality comprising of High Net Worth individuals and more sophisticated investors.
Is My Loan Request Displayed in Public?
No, our loan requests are only accessible to registered Lenders.
What Information Will Lenders Have on Our Business?
In order for Lenders to make an informed decision on whether to lend to you or not, they will need as much information about your business as possible. The following information about your business will be shared with Lenders:
• Your business name, or the name you trade under
• The legal status of your business i.e. sole trader, partnership, LLP or Limited Company
• Description of your business
• Details of existing borrowing
• A summary of your financial performance to include Annual Accounts, Management Accounts and projections
• The purpose of the loan
• The amount you are requesting
• Repayment term
• Monthly repayment amount
• Credit Rating Score Band
• Type of security being offered
• Any other information deemed to be helpful to Lenders in reaching a decision
How Long is the Lender Review Process?
All the documentation relating to your Loan Application is available to all of our Lenders. Because loans are offered on a fixed interest rate (depending on the Credit Rating Score Band) there is no bidding process, so it’s ‘first-come-first-served’. Once a loan is fully funded the funding process is closed. Typically a loan will be funded within 5 to 7 working days.
What Happens If Lenders Have Questions?
You will not hear directly from our Lenders. Any questions they may have will be raised via ourselves and we will contact you.
What If Lenders Don’t Take Up Our Entire Loan Request?
In the unlikely event that Lenders don’t fulfil the entire amount you are requesting then the loan will not be disbursed. In some circumstances, for example where we know that certain Lenders were not available at the time the request was made, we will extend the process.
In certain circumstance where the entire loan amount is not fully pledged, we may be able to compete the application by referring to certain lenders who may be willing to underwrite the balance, on a case by case basis.
If I Need My Funds Quickly is There a Fast Track Process?
Typically, to ensure a high quality of applicants, the depth of the due diligence required necessitates we follow the process and time scale. However, we do understand that in some instances a quicker decision is required in order to take advantage of a business opportunity with a limited time window.
If a quicker decision is required then you can request to follow the Fast Track process which guarantees a one day turnaround in each stage of the process. The higher Application Fee for entering the Fast Track process reflects the prioritisation of your Application above others and the re-ordering of existing work priorities.
However, we can not guarantee that all our Lenders will be able to follow such a time schedule but will do everything in our power to ensure we get an answer to you as soon as possible.
Our over riding principle is too ensure that we write good deals.
What Documents Will We Be Required to Sign?
In order to outline your responsibilities and to protect both you and the Lenders you will be required to submit a Loan Application Form (online) and, if your loan request is agreed, sign a Loan Agreement Letter.
If borrowing is via a Limited Company then Company Directors will be required to sign a Personal Guarantee. If land or property is being pledged then a Legal Charge form will required to be signed or a combination there of.
Any other form of security will also need to be formally pledged via a suitably drafted legal document.
Do You Advise Credit Bureaus of Our Loan?
Yes, we do provide credit bureaus with information on your loan (and of any defaults). More details are outlined in our Privacy Policy.
When Will My Repayments Start?
It is up to you to set up a Standing Order (with the bank details we will supply) with the first repayment being made one month after the funds were made available to you. Because you are expected to make the repayment at same time each month you must ensure you have sufficient funds in your bank account the day before the Standing Order will be processed by your bank.
What Happens if I Fail to Make a Payment on Time?
Naturally we would expect all payments to be made on time to honour the commitment and faith Lenders have made to you. However, if payment has not been made, ideally we would like you to contact us first to advise us instead of us making you aware.
When speaking to us we would expect you to tell us why payment will be sent and we will advise the Lenders.
Missed payments entail additional work for all parties and as a result each missed payment will generate a Missed Payment Fee of £15, which will be charged to your loan. A further £15 on each subsequent attempt to collect payment or contact you will also be added.
If missed payments are not paid. then we will pass your file for chasing on to a Debt Collection firm and ultimately we will take the necessary steps to enforce the security you have provided. All costs in respect of following up missed payments or enforcing security will be your responsibility.
Can We Pay Our Loan Off Early?
Yes. There may be an Early Repayment Fee to reflect the additional administration and any costs incurred by our lender(s), but these will be outlined and reflected in your loan application (if applicable).
The reason this is not a hard and fast rule is that we encourage early repayment of your loan as it allows you to build a good history of Capital repayments which will help with future borrowings using our lenders.
www.Melding.co.uk
Register Now to see if you meet the Criteria
Melding Ltd (No. 8717078) and Melding Security Trustee Company Ltd (No. 9281426) are registered in England and Wales. Trading office is Melding Limited, Kemp House, 152 City Road, London EC1V 2NX. Registered office is 20-22 Wenlock Road, London N1 7GU.
Melding Ltd is regulated by the Financial Conduct Authority (FCA) 723131 and is registered with the Office of the Information Commissioner, Reg no. A1023157. Melding Ltd is also regulated by the Anti Money Laundering Act of 2007. Melding Ltd or any of its associated companies are not covered by the Financial Services Compensation scheme.
Risk Warning: Investments through Melding Ltd involves making direct loans to individuals and companies. You could lose all or part of your capital. Prospective Lenders should note that past performance should not be seen as an indication of future performance. The value of a loan and the income from it can fall as well as rise and Lenders may not get back the amount originally loaned. Therefore you should only make investment in unlisted companies which you can afford to lose without having any significant impact on your overall financial position or commitments. Taxation levels, bases and reliefs may change if the law changes and independent advice should be sought. We will not have any liability for any legal, investment or tax issues in connection with any loan you decide to make through our website.
You could lose all or part of your capital.
Melding Ltd is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Melding Ltd and Melding Security Trust Ltd once you have agreed to our standard terms and conditions and are registered on our records as a sufficiently sophisticated investor.