Understanding the borrowing process at FOLK2FOLK

How does borrowing from FOLK2FOLK work?

We know that borrowing can sometimes feel overwhelming, especially if you’ve been turned down by traditional lenders or you’re unsure what to expect. At FOLK2FOLK, we believe in making business finance straightforward and human. Here’s a step-by-step guide to how our borrowing process works, from initial enquiry to receiving your funds.

Step-by-step: the FOLK2FOLK borrowing process

1. Initial Enquiry
You or your broker contacts us to discuss your business funding needs. Whether you need to diversify your farm, build property, buy equipment, or bridge a funding gap, we’ll explore whether your loan purpose and proposed security are likely to meet our criteria. Submit an enquiry

We’ll ask about your business plans, how much you want to borrow, what security you can offer, and your preferred timelines.

2. Indicative Costs & Terms
If your proposal looks like a good fit with us, we’ll issue a set of indicative costs and terms. These outline the proposed loan amount, interest rate, fees, and other key details so you can decide whether to proceed before formal checks begin. There is no obligation for you to proceed.

3. Application & Due Diligence 
If you’re happy with the indicative terms, we move to due diligence. This involves:

• Collecting documents about your business, property, and plans
• Conducting credit and legal checks
• ID and Address verification checks for anti-money laundering regulations
• Carrying out a valuation of the proposed security

Our team will guide you and stay in close contact.

4. Credit Assessment & Approval
Your application goes to our in-house Credit Committee to be assessed by our experienced team (not algorithms) who take a holistic view of your plans and property security. Our Credit Committee meets ‘on demand’ to maintain the momentum of your loan application.

5. Legal Process & Signing
Once approved, both parties instruct solicitors to handle the legal documentation. This includes formalising the security charge, ensuring all necessary paperwork is in place, and confirming your obligations.

6. Funding:
Once you accept the Offer Letter, we issue your loan to our community of investors as an investment opportunity.  There is no guarantee that they will choose to invest in your loan.

7. Funds released & Drawdown
Once everything is signed and approved and the loan is filled by investor funds, funds are released to your solicitor. From there, you can access your capital and move ahead with your plans.

8. During the Loan Term
Our loans are interest-only, so you’ll make fixed monthly interest payments for the term of the loan.

9. Loan Repayment
At the end of the term capital must be repaid in full.

What You’ll Need to Provide

To apply, you’ll need to supply:

• Detailed information about your business, its purpose, and how the loan will be used.
• Property details, including title information and proof of ownership.
• Proof of identity and address for directors, shareholders, or other guarantors, if applicable.
• Financial information, such as accounts, cash flow forecasts, and bank statements.
• Any additional documents requested during the application process (e.g., insurance details or planning permissions).

Security Requirements

• Loans must be secured against UK property or land.
• Borrowers must maintain adequate insurance on the secured property, at least equal to its value or the loan amount.
• Additional guarantees may be required from directors, shareholders, or property owners.

How long does it take?

Timeframes vary depending on your circumstances, the responsiveness of all parties, and how quickly a valuation and legal checks can be completed. We move as quickly as you do, and we’ll keep you informed every step of the way.

Costs and Fees

We’re transparent about fees to help you plan ahead. View our Fee Schedule.

Next steps

If you’re ready to get started, make an enquiry today or if you still have questions talk to us.