Q: 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, experience in the industry, or in the case of the purchase of a going-concern), we will accept applications for start-up projects, but typically we expect applicants to have been trading for at least 12 months.
An applicant business must be based and operating in the UK; the promoters/directors must be UK residents; and all parties must be considered creditworthy as determined by the outcome of our due diligence process.
Q: What is the Minimum Amount I Can Borrow?
The minimum amount is £50,000.
Q: What Interest Rate Will We Be Charged?
This depends on your Credit Rating Score Band (CRSB), of which there are five. Each of the five CRSBs has a fixed interest rate; the interest rate you will be charged depends on a variety of factors. If your application is accepted you will be assigned a CRSB.
The interest rates applicable to each CRSB will be periodically reviewed to reflect current and expected market conditions and Lender expectations. Changes to a CRSB’s interest rate will only affect new applications and not those loans already drawn down which remain at the original fixed rate.
Q: 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.
Please note that application fees are non-refundable regardless of the outcome of the credit assessment process.
While we wish to put forward as many applications as we can to our external Credit Assessment Team there will be instances where we feel the 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 case we suggest that you take professional advice.
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.
If your application passes our Credit Assessment process and your loan is satisfied in full by our Lenders, an Arrangement Fee is payable and the rates are displayed here.
When you start your repayments, included in the amount is a Payment Processing Fee is calculated under the terms and conditions of MangoPay.
Q: How Do You Determine 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. Each loan request is assigned a Credit Rating Score Band (CRSB).
The CRSBs are:
A – Low Risk
B – Medium Risk
C – Average Risk
D – High Risk
E – Highest 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 offered and the valuation
- The industry sector
Q: If Our Request Passes the First Review When Can We Expect to Be Contacted?
Assuming we have all the required information then you can expect contact from us within 2 working days of receipt of all the information.
The first contact will be via telephone or email and will be a ‘get to know you’ call to talk through your application.
If we are satisfied with the outcome of this call we will then arrange an appointment at a time suitable for all parties will be scheduled as quickly as possible for a (virtual) face-to-face interview with a member of our team.
Once we are satisfied that your request is suitable to be placed in front of our Lenders we will submit your Application for formal review by our Credit Assessment Team.
Q: 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. If successful, at that point your request is then passed on to our Lenders.
If your application is refused during any stage of the process we will advise you of the reasons for the refusal.
Q: Who Are Your Lenders?
Registration to become a Lender is open to all but admittance to the Register is vetted. We request that all Lenders be able to pledge a minimum amount of £1,000 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 comprise generally of high net worth individuals, more sophisticated investors and general business owners. However, anyone can apply to be a lender.
Q: Is My Loan Request Displayed in Public?
No, our loan requests are only accessible to registered Lenders.
Q: 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
Q: 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.
Q: What Happens If Lenders Have Questions?
You will not hear directly from our Lenders. Any questions they may have will be raised via us and we will contact you.
If during any part of the process additional, detrimental information comes to light then your application can be turned down and withdrawn.
Q: How Long Will My Request Remain Open?
Your request will be open for at least 14 working days but is reviewed on case by case basis.
Q: 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 can extend the process at our discretion.
In certain circumstances we may allow an application to be reappraised if a project could, for example, be broken down into smaller, independent parts.
Q: 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 that we follow a process and time scale. However, we do understand that in some instances a quicker decision is required in order to take advantage of an opportunity with a limited time window.
At present, we do not provide a fast track option but will be happy to discuss your requirements as part of the initial review.
Q: What Documents Will I 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 (as provided via the online process) and, if your loan request is agreed, sign a Loan Agreement.
If the borrower is a Limited Company then all Company Directors will be required to sign a Personal Guarantee and a debenture will be taken over the assets of the company. If land or property is being pledged then a mortgage will be required.
Any other form of security will also need to be formally pledged via a suitably drafted legal document.
In all cases security documentation will need to be signed with a Solicitor who will explain the nature of the documents you will be signing, the cost of which is met by you.
Q: Do You Advise Credit Bureaus of My Loan?
Q: When Will My Repayments Start?
Typically, it is up to you to set up an arrangement from your designated Bank account and fund your online e-wallet supplied via MangoPay.
As you are expected to make the repayment at the agreed repayment schedule date, you must ensure you have sufficient funds in your bank account the day before the payment is due and deposited to your e-wallet.
Q: What Happens if I Fail to Make a Payment on Time?
We 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 having to chase you.
When speaking to us we would expect you to tell us when 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 £25 which will be charged to your loan. A further £25 will be charged on each attempt to collect payment or contact you.
If missed payments are not paid then we will pass your file for chasing on to a Debt Collection firm.
Ultimately we will take the necessary steps to enforce the security you have provided so you need to be aware that the assets you have pledged could potentially be at risk. All costs in respect of following up missed payments or enforcing security will be your responsibility.
Q: Can We Pay Our Loan Off Early?
Your loan can be paid off early subject to an early repayment fee equivalent to 1% of the outstanding balance and 30 days notice.
Q: Can I change the amount I want to borrow after applying?
Once you have applied for a loan you cannot change the amount you want to borrow. Stratosphere’s credit assessment decision is dependent on the loan amount requested. Stratosphere’s underwriters may deem that you can borrow a lower amount than that requested. If this is the case, an underwriter will contact you directly.
Q: Can I change the monthly repayment date for the loan?
There is significant administration involved in contacting lenders to change the repayment date for a loan, however, if you are experiencing ongoing problems in repaying your loan on a certain date please contact us and we will attempt to get this changed on your behalf.
Q: Can my business choose the agreed frequency repayment date for the loan?
The frequency repayment date is set out in the loan contract as a schedule of payments.
Q: Can I or my business have more than one Stratosphere loan?
Yes, businesses and individuals can take out more than one loan with Stratosphere.
We will usually require between 3 and 6 months (or the equivalent period) of repayments from your previous loan before considering a second loan application. In some cases though, we will consider a second application based on the rating of your profile.
Additional funding requirements are treated on a case by case basis, and you will be required to fully submit a new loan application to be assessed by our credit assessment team.
Please contact us for further details.
Q: Can I or my business make one-off payments to pay down my loan?
You cannot partially pay down a loan. You can repay a loan early in full at any time.
Q: How do I accept the loan?
Once your loan request is fully funded, an email will be sent as confirmation. When you confirm by responding to the email (as per instructions supplied), you will be shown the loan contract. You should read through this carefully. If you decide to accept the loan, funds will be remitted to your e-wallet account once security over the asset has been arranged.
Q: How do I change repayment details for my business?
If you wish to change the details for your repayments please contact us.