Loan Scheme links Olderpreneurs with Online Investors

The Olderpreneur Loan scheme is open to those with a viable business plan

The Olderpreneur Loan scheme is open to those with a viable business planAn online lending scheme has been launched which matches budding entrepreneurs aged 50 and over with private micro-investors.

Launched by age concern charity PRIME and lending exchange Zopa, the Olderpreneur Loan scheme is open to those with a viable business plan who are looking for finance to get their venture off the ground. Loans of up to £15,000 are available over a repayment period of between one and three years.

Unusually, the scheme works by drawing the support of members of the public who are looking to invest in new business ideas. PRIME is operating the scheme with Zopa, an online facility where people meet to lend money to new ventures, meaning that entrepreneurs borrow from other individuals, rather than from a bank. The scheme is also supported by the charitable arm of the Bank of America.

To apply, applicants must set out how their business will work, and in particular, how their business idea will cover both the loan repayments and their own living expenses.

Once PRIME has accepted an initial application, potential businesses are required to write a short pitch for the Zopa website, where lenders will then assess whether they want to invest or not. Entrepreneurs can decide whether to accept or reject offers of investment.

Interest rates will be set at the time of the loan offer, but will typically be between 4 and 15%, depending on the perceived risk of the venture. There is a one off set-up fee of £118.50, which can be added to the repayment amount.

“We are guaranteeing 50% of any loan value up to the maximum value of £15,000, to give lenders a safety net,”

said PRIME spokesman Mark Lywood.

“Zopa is a database of lenders, like an auction site, and the applicant can reject an offer if they don’t want that interest rate.

“We’re hoping this scheme will encourage more lenders to lend to older entrepreneurs, as there isn’t really a market for the over 50s and it can be difficult for them to get lending through conventional means.”

To be eligible, applicants must be aged 50 or over, not have taken out a loan in the past four months and have been based in the UK for the last three years.

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