Charity Advance
Support for Charities
We understand that many charities rely on legacy income to fund their charitable activities. This can include purchasing specialist equipment, running charitable projects and a whole range of related one-off costs.
Delays in obtaining probate and settling estates have resulted in charities having to wait much longer than before to receive vital funds. Consequently, high priority spending decisions are often delayed. This can cause enormous strain on charities and the communities they support.
As a specialist in providing loans based on future legacy income, we can solve this problem.
We will assess your expected future legacy income, either on an individual or whole of book basis, and determine the size of Advance we can provide. If you decide to go ahead we can normally provide funds within a few days.
Advance Structure
Exactly how your Advance will work depends on your individual circumstances. We will always work closely with you to agree a cost and fee structure that meets your need. However, typical structures include:
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An initial payment holiday of X months and then loan is repaid in full (capital, fees and interest) by monthly payments so that the loan is fully repaid within X years.
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No monthly repayments and no early repayment fees. Loans are repaid in full (capital, fees and interest) when funds are available.
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Interest on the loan paid monthly. Capital and fee repaid when funds are available.
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Monthly repayments over a set period of time to cover capital, interest and fees.
Advance Cost
The cost of the Advance may vary depending on a range of factors (size, duration, LTV etc.). However, typically fees are an arrangement fee of 2% – 3% of the value of the Advance and the interest rate is between 1% – 1.5% per month.
Representative Example
An Advance of £100,000 might incur an arrangement fee of 3% (£3,000). Interest is calculated on the advance and the fee. Interest is calculated and applied daily, based on an annual rate of 12% (fixed). Assuming the Estate takes 12 months to liquidate and you repay the loan in full (capital, interest and fees) at that time, you would owe £12,360 in interest plus £3,000 in fees and £100,000 capital, resulting in a balance of £115,360 and a representative 15.36% APR.
To apply or for more information contact us on
Process
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Contact us on 0203 813 6400 or [email protected]
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We will be in touch with 24 hours to discuss your circumstances and requirements.
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We will confirm the information we will need for underwriting purposes. This will depend on your circumstances and whether we are basing our decision on a specific legacy or on a whole of book basis.
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On receipt of the required information, we will review your application and revert within a few days.
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If approved, you will receive a formal offer
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If you decide to proceed we will issue loan documents for signature (normally electronically). As soon as all documents are signed we will release funds.
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We will keep in touch throughout the length of the loan. You repay the loan as per the terms of the loan agreement.
FAQs
A Charity Advance is based solely on the value of either a specific future legacy you are expecting to receive or your whole future legacy book.
You can apply at any time, but you will need to provide evidence to support the value of the legacies you are relying on to repay the Advance.
You can use a Charity Advance for any one-off or nonregular expense that does not relate to the day to day running costs of the charity
This is managed very carefully during our underwriting process and through cautious LTVs to ensure it does not happen. We will only lend an amount we are confident you can comfortably repay. However, should there be one, you would be responsible for funding any shortfall.
The minimum loan amount is £50,000. The maximum loan amount depends on the size of the legacy income on which we are basing our underwriting. We will work with you to agree what percentage of that income we can lend against.
On a specific legacy, it would typically be around 40%. On a whole of book basis it would typically be around 30%.
The exact cost may vary depending on the size of loan and the value of your future legacy income. However, typical costs are a 2% – 3% arrangement fee (added to the loan) and an interest rate of 1% – 1.5% per month.
That depends on the loan structure we agree. Typically the loan would be repaid in monthly repayments following an initial payment holiday, or in one go when funds are available. The loan term is typically 2 years.
Provira is a specialist finance company, authorised and regulated by the FCA. Our team are experience finance professionals, having successfully launched and invested in many innovative specialty finance businesses. We are passionate about building disruptive businesses that focus on benefiting our customers. We’ve worked for and with some of the largest and most reputable financial institutions globally.
I still have questions,
what should I do?
That’s OK, we’re here to help however we can.
Email us anytime on [email protected] or call us on weekdays (excluding bank holidays) between 9am to 5pm on +44 (0) 203 813 6400. If for whatever reason we can’t take your call, we will get back to you as soon as possible.
