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CBILS Loan Conditions

1. Introduction

1.1 The CBILS Loan Contract is made up of:

  1. these CBILS Loan Conditions; and
  2. the agreed CBILS Key Contract Terms applicable to each CBILS Loan (including the Payment Schedule referred to in clause 2.1).

1.2 The Investor and the Borrower are both parties to the CBILS Loan Contract. Funding Circle is not a party to the CBILS Loan Contract, but it does have certain third party rights under it.

1.3 This CBILS Loan Contract is supported by the Coronavirus Business Interruption Loan Scheme (“CBILS”). Under the rules of the CBILS, no funds will be advanced under this CBILS Loan Contract until the Borrower has signed and returned the Borrower Information Declaration and Data Protection and Disclosure Declaration to Funding Circle together with any other information we require.

1.4 The Investor’s ability to provide the Borrower with this CBILS Loan is dependent on the Investor receiving a guarantee from the UK Government under the CBILS. The guarantee provides the Investor with a partial guarantee, should the Borrower default on repaying this CBILS Loan.

1.5 The CBILS guarantee is provided to the Investor and not the Borrower. The Borrower remains responsible for repaying the whole of the Total Amount Payable under this CBILS Loan at all times.

1.6 If the CBILS Loan Principal is less than or equal to £250,000, no Personal Guarantee shall be required and no Personal Guarantee given under any other Loan shall be used to recover any amount owed under that CBILS Loan. If the CBILS Loan Principal is greater than £250,000, a Personal Guarantee shall be required.

2. Repayment

2.1 The Borrower agrees to repay the Total Amount Payable to Funding Circle at the times and in the instalments identified in the Repayment Schedule, together with all fees and costs which may become payable in accordance with these CBILS Loan Conditions. Payment by the Borrower to Funding Circle pursuant to this clause 2.1 shall, unless the Borrower is notified otherwise by or on behalf of the Investor, satisfy the Borrower’s payment obligations to the Investor. If the Borrower is late in paying an instalment, the Investor and Funding Circle will have the rights detailed in clauses 4 and 5.

2.2 The Borrower's obligation to make repayments to the Investor will be satisfied from the Borrower Account. To the extent that there are insufficient funds in the Borrower Account to meet its payment obligations or a payment is not made in full and on time, Funding Circle will arrange for a direct debit payment or payment authority to be completed, complete a debit or credit card transaction or use an alternative payment method, which may incur a fee. This is to ensure that sufficient funds are deposited into the Borrower Account to meet all such payment obligations to the Investor.

2.3 All repayments will be made to Investors without deduction of income tax save to the extent required by law.

2.4 If a CBILS Loan is in arrears, but before Funding Circle has demanded repayment of the Total Amount Payable under clause 4.2, each payment made to Funding Circle by the Borrower (or a Personal Guarantor) in respect of the CBILS Loan will be applied:

  1. first towards repaying any arrears on the CBILS Loan; and
  2. second towards paying the Outstanding CBILS Loan Principal and Accrued Interest due in respect of the CBILS Loan in accordance with the Repayment Schedule.

2.5 If a CBILS Loan is in arrears, but before Funding Circle has demanded repayment of the Total Amount Payable under clause 4.2, in addition and in priority to the payments outlined in clause 2.4, Funding Circle may require payment of any administration charges, costs, expenses or other fees or charges due to Funding Circle and/or the Security Agent as contemplated under the CBILS Borrower Terms and Conditions or these CBILS Loan Conditions.

2.6 If an Event of Default has occurred and Funding Circle demands full repayment of the Total Amount Payable under clause 4.2, Funding Circle will apply any recovery payments received in the following way:

  1. up to the first 40% of any recovery payment to pay any administration fees or Collections Charges (any Collections Charges to be capped at a maximum of 20% from any recovery payments received), costs, expenses or other fees incurred in respect of the CBILS Loan, as outlined below at clause 5.4;
  2. second, to the outstanding principal of the CBILS Loan until paid in full;
  3. third to the outstanding Accrued Interest until paid in full; and
  4. fourth, to pay any remaining administration fees or Collections Charges, costs, expenses or other fees incurred in respect of the CBILS Loan, as outlined below at clause 5.4,
or otherwise as provided for in the CBILS Borrower Terms and Conditions.

3. Interest

3.1 The Borrower agrees to pay interest on the CBILS Loan at the Fixed Interest Rate outlined in the CBILS Key Contract Terms. Interest shall accrue at the Fixed Interest Rate on and from the CBILS Loan Completion Date to the date of actual repayment, and shall be calculated at the outset for the whole period of the CBILS Loan.

3.2 The Borrower will not be required to make any repayments against the CBILS Loan during the first 12 months of the CBILS Loan (the “BIP Period”), during which time the UK Government will make interest payments on the Borrower’s behalf. After the BIP Period, the Borrower shall make monthly amortised repayments comprising interest and principal to the Investor.

3.3 If a CBILS Loan repayment is not made in full on its contractual scheduled repayment date, or if there is an Event of Default and full repayment of the Total Amount Payable is demanded under clause 4.2, interest shall continue to accrue on the CBILS Loan at the Fixed Interest Rate and shall be immediately due and payable as it accrues. Interest at the Fixed Interest Rate, calculated on a daily basis, shall continue to apply to any Outstanding CBILS Loan Principal until all amounts due in respect of the CBILS Loan have been repaid in full. This interest shall accrue at the Fixed Interest Rate both before and after any court judgment obtained against the Borrower (or Personal Guarantor) (computed at such intervals as Funding Circle shall decide).

4. Early repayment and termination

4.1 If the Borrower wishes to repay a CBILS Loan early, it may do so at any time after the CBILS Loan Completion Date. In such case, the Borrower must repay the entire Outstanding CBILS Loan Principal and all Accrued Interest, other than Accrued Interest to be paid by the UK Government during the BIP Period under clause 3.2, together with any fees and costs which may be payable in accordance with these CBILS Loan Conditions, at the date of early repayment. It can do so by following the instructions in the Borrower Account. If a CBILS Loan is repaid early, the Borrower must pay Accrued Interest (if any) up to the next scheduled repayment date or, if a CBILS Loan is repaid fewer than eight days before the next scheduled repayment date, the Borrower must pay Accrued Interest up to the subsequent scheduled repayment date (and so will incur a further month’s interest). Early repayment of the CBILS Loan shall not entitle the Borrower to any rebate in amortised interest that has been paid or is owing to the date of settlement.

4.2 Each of the following circumstances is an Event of Default. Funding Circle may demand early repayment of the Total Amount Payable, together with any fees and costs which may become payable in accordance with these CBILS Loan Conditions, if any of the following Events of Default occurs or arises:

  1. the Borrower misses, fails to pay or does not make a full monthly payment when due under the CBILS Loan Contract;
  2. the Borrower has provided false information or has failed to provide any material information of which it is aware in a way which affects or would have affected the decision to allow the Borrower to register as a member of Funding Circle, the decision to approve the CBILS Loan Request from the Borrower or the risk band that Funding Circle has given to the CBILS Loan;
  3. the Borrower has breached the terms of a CBILS Loan Contract (or those relating to a different loan on the Funding Circle Platform) or of any other loan or financing agreement to which it is a party, if either:
    1. notice has been given to the Borrower demanding repayment of the relevant loan or agreement; or
    2. Funding Circle has reasonable grounds to believe that as a result either the Borrower will also breach the terms of the CBILS Loan Contract (or any of them) entered into on the Funding Circle Platform or any of the other Events of Default stated in this clause will occur;
  4. the Borrower uses the proceeds of the CBILS Loan for a purpose other than that specified in the Loan Application;
  5. the Borrower fails to provide Security when reasonably required by Funding Circle or has breached the terms of any Security Document to which it is a party or any future Security which the Investor, the Security Holder or other Funding Circle Company may hold from time to time;
  6. the Borrower's membership of Funding Circle is terminated for any reason under the CBILS Borrower Terms and Conditions;
  7. a petition is presented, or an order made, against the Borrower or any Personal Guarantor, or an effective resolution passed for the winding up or dissolution or for the appointment of a liquidator of the Borrower;
  8. the Borrower or any Personal Guarantor ceases to pay its debts or is unable to pay its debts as they fall due or is deemed unable or admits its inability to do so, or makes a general assignment or agreement for the benefit of or a composition with its creditors;
  9. the Borrower or any Personal Guarantor ceases to carry on its business or a substantial part of its business;
  10. notice is given of an intention to appoint an administrator, a petition is filed or a competent court makes an order for the appointment of an administrator in relation to the Borrower;
  11. an encumbrancer takes possession or steps are taken for the appointment of an administrator or receiver or administrative receiver or manager or supervisor or sequestrator over the whole or any substantial part of the undertaking or assets of the Borrower;
  12. a Personal Guarantor breaches the terms of a Personal Guarantee or other Funding Circle-related document that it is a party to, or disputes or threatens to dispute the enforceability of that Personal Guarantee or other document, or suffers or is likely to suffer a material adverse change to its financial position, or Funding Circle has any reason to believe that a Personal Guarantee or Security Document has become unenforceable, and in any case, a replacement Personal Guarantee or Security Document has not been provided to Funding Circle's reasonable satisfaction within 14 days of a request from Funding Circle;
  13. if the Borrower or any Personal Guarantor is a private individual, the Borrower or Personal Guarantor dies, becomes of unsound mind, becomes bankrupt or makes a voluntary arrangement with anyone that they owe money to;
  14. if the Borrower is a partnership, the composition of the partnership materially, in the reasonable opinion of Funding Circle, changes or any partner dies, becomes of unsound mind, becomes bankrupt or makes a voluntary arrangement with anyone to whom such partner owes money;
  15. if a claim by HM Revenue & Customs (or any other governmental department or agency or other public body) is, or is reasonably likely to be adversely decided against the Borrower or any Personal Guarantor and the Borrower or any Personal Guarantor does not meet any payment obligation relating to that claim within the required period;
  16. a material adverse change occurs in the financial condition or business prospects of the Borrower or any Personal Guarantor, or Funding Circle believes that the prospect of payment or performance of the liabilities of the Borrower or any Personal Guarantor to the Investor is impaired; or
  17. the Borrower or any Personal Guarantor is abusive or offensive towards any Funding Circle employees.

5. Funding Circle fees

5.1 As this CBILS Loan is supported by the UK Government, the UK Government will pay the CBILS Loan Completion Fee to Funding Circle on behalf of the Borrower. The CBILS Loan Completion Fee will be identified in the CBILS Key Contract Terms.

5.2 Funding Circle will charge a Servicing Fee which is payable by the Investor to Funding Circle monthly in arrears.

5.3 If a back-up servicer is appointed to undertake loan servicing activities, the back-up servicer would continue to collect the Servicing Fee. It may also charge an additional Special Situation Fee that will be calculated as a percentage of the Outstanding CBILS Loan Principal. The total fees collected by the back-up servicer will not exceed 2% per annum of the principal of each CBILS Loan outstanding. If the Borrower is notified of the termination of Funding Circle’s appointment as servicer, the rights and powers of Funding Circle in respect of loan servicing activities and other applicable Intermediary Services pursuant to the CBILS Borrower Terms and Conditions, shall accrue to, and be exercisable by, the applicable back-up servicer for and on behalf of the Investor.

5.4 Funding Circle will be entitled to charge the Borrower other fees or charges which the Borrower will be liable to pay in addition to the Accrued Interest. These are:

  • if a payment due from the Borrower under the CBILS Loan has not been made when due, and has been outstanding for seven days or more, an administration fee of 15% of the overdue amount;
  • if the Borrower is four or more payments in arrears under a CBILS Loan Contract, or if Funding Circle (on behalf of the Investor) exercises its right to demand repayment of the Total Amount Payable under clause 4.2 and the Borrower fails to repay the CBILS Loan, a Collections Charge up to a maximum of the sums set out in the Collections Charge schedule applicable at the effective date of the Loan Contract (which can be accessed here). The Collections Charge will be deducted from any recovery payments subsequently received and will be capped at a maximum of 20% of each recovery payment (provided that, if Funding Circle refers the case to an external Collections Agent to collect the debt, no Collections Charge shall be applied directly by Funding Circle but, in such a scenario, a Collections Fee levied by the Collections Agent may become payable);
  • tracing charges (for finding the Borrower if it can't be contacted by Funding Circle or a Collections Agent);
  • a fee if a field agent has been employed as part of the collections process; and
  • all litigation, enforcement and recovery costs and expenses, including (but not limited to) legal fees and expenses.

5.5 All fees, costs, charges, expenses or other amounts which Funding Circle may charge the Borrower will be payable on demand made by Funding Circle and, if not paid on demand, will accrue interest at the Fixed Interest Rate.

5.6 Funding Circle has a legitimate interest in investing in its own in-house recoveries team to maximise returns to investors whilst giving Borrowers and Personal Guarantors the fairest customer experience. The administration fee referred to in clause 5.4(a) above and the Collections Charge referred to in clause 5.4(b) above are intended to be a genuine pre-estimate of the cost to Funding Circle of investing in an in-house recoveries team including but not limited to the employment of staff, the use of IT systems, external legal costs (that are not recoverable through the relevant loan) and the provision of facilities and technology to aid in the recovery for investors.

5.7 Following the occurrence of an event in clause 5.4(b), the in-house Collections, Recoveries & Litigation teams may be required to deal with the case for a number of years at a continuing cost to Funding Circle. However, any Collections Charge applied will be a one-off charge, and Funding Circle will allocate up to a maximum of 20% of each recoveries payment received from the Borrower against such Collections Charge in order to be more aligned with investors. In the case of the fees referred to in clauses 5.4(b), (c), (d) and (e) above, where it is appropriate to do so, the Borrower will be advised of the cost if such action proves necessary. The Borrower will be notified (by way of general update to the CBILS Borrower Terms and Conditions or on the Funding Circle Platform) if these charges change in nature or amount.

5.8 The fees and charges outlined in clause 5.4 above may be paid into a separate bank account in the name of Funding Circle. The monies in this account are for the benefit of Funding Circle and are separate to any payments made under the CBILS Loan before an Event of Default has occurred, and any recovery payments made following the occurrence of an Event of Default under the CBILS Loan Contract.

6. Borrower representations and warranties

The Borrower represents and warrants that:

  1. the Borrower's business has been adversely impacted by Covid-19;
  2. prior to Covid-19, the Borrower (or, if the Borrower is part of a group, the Borrower's group) was trading successfully and is not classed as an Undertaking in Difficulty;
  3. the Borrower (or, if the Borrower is part of a group, the Borrower's group) generates more than 50% of its turnover from the sales of goods and services i.e. trading activity;
  4. the Borrower's business (or, if the Borrower is part of a group, the Borrower's group) has a turnover of not more than £45 million and fewer than 250 employees;
  5. this CBILS Loan will be used to support business activity within the UK;
  6. the purpose of this CBILS Loan is for working capital to support the Borrower's business or to fund expansion/growth of the Borrower's business
  7. the CBILS Loan Principal does not exceed 25% of the Borrower's turnover for 2019; and
  8. the Borrower (or, if the Borrower is part of a group, the Borrower's group) does not have an existing loan under the Bounce Back Loan Scheme (BBLS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England's COVID Corporate Financing Facility (CCFF) or, if it does, this CBILS Loan will be used to repay the whole of any existing BBLS, CLBILS or CCFF loan.

7. Information undertakings

7.1 If the Borrower is, or at any time becomes, aware of any of the following circumstances, claims or potential claims, then the Borrower will promptly provide to Funding Circle full written details of the circumstances, claims or potential claims:

  1. circumstances (including without limitation any claims, undisclosed liabilities, litigation, arbitration, court proceedings or investigations which are current, threatened, pending or otherwise reasonably likely to occur against the Borrower or any Personal Guarantor by any third party) which could or might result in a material adverse change in the Borrower’s financial condition, business or assets or that of any Personal Guarantor; and/or
  2. any current or future claim (or potential claim, including (without limitation) if an investigation has commenced) by HM Revenue & Customs (or any other governmental department or agency or other public body) against the Borrower and that of any Personal Guarantor.

7.2 The Borrower shall, from time to time, on request from Funding Circle, provide Funding Circle with such information as it may require about the Borrower’s financial condition, business and affairs, and compliance with the terms of the CBILS Loan Contract.

7.3 The Borrower shall permit employees or agents of Funding Circle or other third party business advisory/audit professionals on reasonable notice and during business hours to attend and inspect its premises and inspect any secured assets and any of the Borrower’s books, accounts and records and to make copies of any such information. The Borrower agrees to meet with any such employee, agent or third party professional within 21 days of request by Funding Circle, and answer all reasonable queries of such employee, agent or third party professional.

8. Purpose of CBILS Loan

The Borrower will use the CBILS Loan only for the specified purpose and agrees that:

  1. if the purpose of the CBILS Loan is to refinance the Borrower’s other existing indebtedness, the CBILS Loan proceeds may be advanced by Funding Circle directly to the relevant creditor or creditors of the Borrower or, if Funding Circle consents to the Borrower satisfying other existing indebtedness with the CBILS Loan, the Borrower will provide evidence satisfactory to Funding Circle within two working days of the CBILS Loan proceeds being advanced to the Borrower that the relevant existing indebtedness has been discharged in full. A failure to do so will entitle Funding Circle to demand immediate repayment of the Total Amount Payable under clause 4.2; and
  2. if the proceeds of the CBILS Loan are used by the Borrower for any purpose other than the purpose specified in the CBILS Loan Application, this will entitle Funding Circle to demand immediate repayment of the Total Amount Payable under clause 4.2.

9. No reliance

The Borrower and the Investor confirm that, in entering into the CBILS Loan Contract, it has not relied on any representation, written statement, advice, opinion or information made or provided by, or on behalf of, Funding Circle, the Security Holder or any Funding Circle Company. The Borrower and the Investor further each confirms that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with the CBILS Loan Contract.

10. General

10.1 The CBILS Loan Conditions and the CBILS Loan Contract (and any non-contractual obligation arising out of, or in connection with, the CBILS Loan Conditions and the CBILS Loan Contract) are governed by and construed in accordance with English law, and the Investor and Borrower each submits to the non-exclusive jurisdiction of the English courts.

10.2 In entering into a CBILS Loan Contract, the Borrower agrees that it will not, without the prior written consent of Funding Circle, borrow any monies from its directors, officers, members, partners, shareholders or any other third party that ranks in priority of recovery to the CBILS Loan. If the Borrower does enter into any such loan, the Borrower will enter into all documents as Funding Circle may require to ensure that the rights to payment of that loan will be subordinated behind the CBILS Loan, except to the extent otherwise required by insolvency law.

10.3 On entering into a CBILS Loan Contract, and save in respect of the CBILS Loan, the Borrower agrees that it will not enter into any other new unsecured borrowing arrangement (or any arrangement having the effect of a borrowing) with any third party if the total amount of external finance raised from third parties would as a result exceed the higher of £25,000 and 30% of the total amount lent to the Borrower on all existing Funding Circle loans without the prior written consent of Funding Circle. Such consent shall not be unreasonably withheld. This clause shall not restrict the Borrower from entering into asset-specific financing or invoice purchasing arrangements.

10.4 The Investor may assign or transfer all or part of its respective rights and obligations under this CBILS Loan Contract. The Borrower cannot assign or transfer its rights and obligations under this CBILS Loan Contract.

10.5 Subject to clause 1.6 of these CBILS Loan Conditions, and except where expressly prohibited by the terms of any relevant Government scheme, any Security or Personal Guarantee attaching to this CBILS Loan may be used to recover amounts owing under any other Loan on the terms outlined in that Security or Personal Guarantee.

10.6 If any part of the CBILS Loan Conditions that is not fundamental is found to be illegal or unenforceable, such finding will not affect the validity or enforceability of the remainder of the CBILS Loan Conditions or the CBILS Loan Contract.

10.7 Any waiver by either party of a breach of any provision of these CBILS Loan Conditions and/or a CBILS Loan Contract, or by any person on such party’s behalf, shall not be considered to be a waiver of any other or later breach of the same, or any other, provision.

10.8 Any notices to be given to the Borrower in relation to any CBILS Loan Contract shall either be put on the Borrower Account or shall be sent by email to the Borrower's email address; sent by post or courier to the Borrower’s address registered with Funding Circle or its registered office; or in any other manner deemed appropriate by Funding Circle. Any notices to be given to the Investor should be given to Funding Circle on the Investor’s behalf.

10.9 The records kept by Funding Circle shall be conclusive of the facts and matters they purport to record except if there is an obvious mistake.

10.10 If the Borrower is a sole trader, unincorporated body or general partnership with fewer than four members who are not all themselves corporate bodies, by entering into the CBILS Loan Contracts, the Borrower makes the following declaration:

Declaration for exemption relating to businesses (articles 60C and 60O of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001)

I am entering this agreement wholly or predominantly for the purposes of a business carried on by me or intended to be carried on by me/us.

I understand that I will not have the benefit of the protection and remedies that would be available to me under the Financial Services and Markets Act 2000 or under the Consumer Credit Act 1974 if this agreement were a regulated agreement under those Acts.

I understand that this declaration does not affect the powers of the court to make an order under section 140B of the Consumer Credit Act 1974 in relation to a credit agreement where it determines that the relationship between the lender and the borrower is unfair to the borrower.

I am aware that, if I am in any doubts as to the consequences of the agreement not being regulated by the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974, then I should seek independent legal advice.

10.11 If the Borrower is a partnership, by entering into the CBILS Loan Contract the Borrower makes the following declaration:

I confirm that I am authorised by the partnership to enter into this agreement for and on behalf of the partnership and that I am authorised by the partnership upon entering into this agreement to bind the partnership to the terms of this agreement.

10.12 The Borrower and the Investor each agrees that, while Funding Circle is not a party to the CBILS Loan Contract, Funding Circle is (unless the Borrower is notified otherwise by a back-up servicer, in which case the back-up servicer is) authorised to act on behalf of the Investor in relation to the CBILS Loan Contract and exercise and enforce the rights and powers of the Investor under the CBILS Loan Contract on its behalf and that it may also take the benefit of and specifically enforce each express term of the CBILS Loan Contract and any term implied under it which are for the benefit of Funding Circle pursuant to the Contracts (Rights of Third Parties) Act 1999. Funding Circle will not, however, be under any obligation to perform any obligations of the Investor under the CBILS Loan Contract.

10.13 The CBILS Loan Contract will be entered into by electronic means in accordance with the CBILS Borrower Terms and Conditions by the Borrower and the Investor and this will have the same effect as if the CBILS Loan Contract was signed in a hard single copy.

11. Defined terms

In these CBILS Loan Conditions and the CBILS Loan Contract the following words have the meanings set out next to them in the table below:

Accrued Interest
any interest accrued on a CBILS Loan under clause 3 of these CBILS Loan Conditions.
Borrower
in the context of these CBILS Loan Conditions, a borrower under a CBILS Loan Contract or, as applicable, a person who is applying for CBILS funding through the Funding Circle Platform.
Borrower Account
the account which the Borrower holds with Funding Circle.
CBILS Borrower Terms and Conditions
the terms and conditions that govern the relationship between the Borrower and Funding Circle, as amended or replaced from time to time.
CBILS Key Contract Terms
a summary of the CBILS Loan information for the Borrower which forms part of each individual CBILS Loan Contract.
CBILS Loan
the loan borrowed by the Borrower from the Investor on the Funding Circle Platform pursuant to the CBILS Loan Request.
CBILS Loan Application
an application for a CBILS Loan made by or on behalf of the Borrower.
CBILS Loan Completion Date
the date on which all Funding Circle’s requirements in relation to the CBILS Loan Request have been satisfied and funds have been released to the Borrower.
CBILS Loan Completion Fee
a fee payable by the UK Government to Funding Circle when a CBILS Loan completes, at a rate calculated as a percentage of the CBILS Loan amount.
CBILS Loan Conditions
these Funding Circle CBILS Loan Conditions.
CBILS Loan Contract
a loan agreement supported by the CBILS that sets out the terms of the lending arrangement between the Investor and the Borrower comprising the CBILS Key Contract Terms and these CBILS Loan Conditions.
CBILS Loan Principal
the amount borrowed by the Borrower pursuant to this CBILS Loan Contract and as set out in the CBILS Key Contract Terms.
CBILS Loan Request
the Borrower’s CBILS Loan Application when accepted by Funding Circle and listed on the Funding Circle Platform.
Collections Agent
any debt collection agent as may be appointed by Funding Circle or on behalf of the Investor from time to time.
Collections Charge
a charge payable by the Borrower if the Borrower fails to pay any amount due under the CBILS Loan Contract, which is calculated on the Total Amount Payable.
Collections Fee
any fees levied by the Collections Agent for the purposes of providing collections and recovery services.
Event of Default
any of the events or circumstances referred to in Clause 4.2 of these CBILS Loan Conditions.
Fixed Interest Rate
the interest rate outlined in the CBILS Key Contract Terms.
Funding Circle
Funding Circle Ltd.
Funding Circle Company
Funding Circle, Funding Circle Focal Point Lending Limited and all other companies within the Funding Circle corporate group.
Funding Circle Platform
the online direct lending marketplace platform operated by Funding Circle which facilitates lending and borrowing between investors and Borrowers.
Investor
Funding Circle Focal Point Lending Limited, or any permitted assignee, transferee or other successor in title.
Loan
a loan borrowed by a Borrower from an investor (or investors, if applicable) on the Funding Circle Platform.
Outstanding CBILS Loan Principal
the CBILS Loan Principal minus any amounts already repaid pursuant to clause 2 of these CBILS Loan Conditions.
Personal Guarantee
a guarantee entered into by a Personal Guarantor to guarantee the Loan repayment obligations of the Borrower.
Personal Guarantor
any natural person or corporate or unincorporated body, in each case whether or not having a separate legal personality, that has guaranteed the obligation of the Borrower under or in connection with any Loan.
Repayment Schedule
the schedule of loan repayments provided to the Borrower for its CBILS Loan.
Security
any debenture, mortgage, charge (whether fixed or floating, legal or equitable), pledge, lien, assignment by way of security or other security interest securing any obligation of any Borrower or Personal Guarantor and any other agreement or arrangement having a similar effect.
Security Agent
Funding Circle or any other person who may be appointed to act as agent for the Security Holder.
Security Document
a document that creates Security including but not limited to, an all assets security agreement, a debenture, a legal mortgage and any other form of Security, in a prescribed form, executed by the Borrower or the Personal Guarantor granted in conjunction with the CBILS Loan or the Personal Guarantee.
Security Holder
if Security is taken for a CBILS Loan, whichever Funding Circle Company is the holder of such Security in each case acting through Funding Circle or any other party it may appoint from time to time and any person acting as its agent on its behalf.
Servicing Fee
an annualised fee, being 1.25% of the Outstanding CBILS Loan Principal (or as determined by Funding Circle from time to time), payable on a monthly basis to Funding Circle to cover Funding Circle’s role in various intermediary services.
Special Situation Fee
the fee charged by a back-up servicer as set out in clause 5.3 above.
Total Amount Payable
in relation to the CBILS Loan, the total amount of the Outstanding CBILS Loan Principal and all contractual interest due from month 13 (not including the UK Government’s Business Interruption Payment) to the end of the Loan term (pursuant to clause 3 of the CBILS Loan Conditions) outstanding at that time.
Undertaking
the Borrower business (including, where the Borrower business is part of a group, the Borrower's group).
Undertaking in Difficulty
for an Undertaking with fewer than 50 employees and an annual turnover or annual balance sheet of less than £9m, an Undertaking that is, at the date of application for this CBILS Loan:
  • subject to collective insolvency procedure under national law; or
  • in receipt of rescue aid (which has not been repaid) or restructuring aid (and is still subject to a restructuring plan); or
for an Undertaking with 50 or greater employees or an annual turnover or annual balance sheet of more than £9m, an Undertaking that, at the date of application for this CBILS Loan, has:
  • accumulated losses of more than half of its subscribed share capital for limited companies, or for unlimited liability companies its capital; or
  • started, or had fulfilled the criteria to be put into, collective insolvency proceedings; or
  • received rescue aid that is yet to be reimbursed (or, in the case of a guarantee, terminated); or
  • received restructuring aid, and is still under a restructuring plan.

BBLS Loan Conditions

1. Introduction

1.1 The BBLS Loan Contract is made up of:

  1. these BBLS Loan Conditions; and
  2. the agreed BBLS Key Contract Terms applicable to each BBLS Loan (including the Payment Schedule referred to in clause 2.1).

1.2 The Investor and the Borrower are both parties to the BBLS Loan Contract. Funding Circle is not a party to the BBLS Loan Contract, but it does have certain third party rights under it.

1.3 This BBLS Loan Contract is supported by the Bounce Back Loan Scheme (“BBLS”), managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy and Industrial Strategy (the “Guarantor”). The Investor’s ability to provide the Borrower with this BBLS Loan is dependent upon the Investor receiving a guarantee from the UK Government under BBLS. The guarantee provides the Investor with a full guarantee, should you default on repaying this BBLS Loan.

1.4 The Borrower is responsible for the repayment of this BBLS Loan. The BBLS guarantee is provided to Funding Circle and not to the Borrower. The Borrower remains responsible for repayment the whole of this BBLS Loan at all times and if the Borrower fails to do so this may negatively affect the Borrower’s credit score or rating with the credit rating agencies.

1.5 Funding Circle has agreed in connection with the BBLS to certain obligations in respect of its relationship with the Borrower, including making certain information available to the Borrower in relation to this BBLS Loan. For more information, refer to Funding Circle’s FAQs which include details of Funding Circle’s complaints handling procedure and the Borrower’s right to complain to the Financial Ombudsman Service.

1.6 The value of the aid arising from this BBLS Loan is £[•].

Following the outbreak of the Coronavirus, the European Commission has approved schemes to aid businesses affected by the Coronavirus outbreak on the basis of their Temporary Framework, including the Covid-19 Temporary Framework measure for the UK.

The maximum level of aid that a company may receive is €800,000 (€120,000 per undertaking active in the fishery and aquaculture sector or €100,000 per undertaking active in the primary production of agricultural products). This is across all UK measures under the terms of the European Commission’s Temporary Framework.

It is the Borrower’s responsibility to retain records of any State aid arising under this measure. The Borrower must retain this statement for four years after the conclusion of the UK’s transition from the EU and produce it on any request from the UK public authorities or the European Commission. Any aid provided under this measure will be relevant if the Borrower wishes to apply, or has applied, for any other aid granted based on the European Commission’s Temporary Framework. The Borrower will need to declare this amount to any other aid awarding body who requests information from it on how much aid it has received.

2. Repayment

2.1 The Borrower agrees to repay the Total Amount Payable to Funding Circle at the times and in the instalments identified in the Repayment Schedule. Payment by the Borrower to Funding Circle pursuant to this clause 2.1 shall, unless the Borrower is notified otherwise by or on behalf of the Investor, satisfy the Borrower’s payment obligations to the Investor. If the Borrower is late in paying an instalment, the Investor and Funding Circle will have the rights detailed in clause 4.

2.2 The Borrower's obligation to make repayments to the Investor will be satisfied from the Borrower Account. To the extent that there are insufficient funds in the Borrower Account to meet its payment obligations or a payment is not made in full and on time, Funding Circle will arrange for a direct debit payment or payment authority to be completed, complete a debit or credit card transaction or use an alternative payment method. This is to ensure that sufficient funds are deposited into the Borrower Account to meet all such payment obligations to the Investor.

2.3 All repayments will be made to the Investor without deduction of any taxes save to the extent required by law.

2.4 If a BBLS Loan is in arrears, but before Funding Circle has demanded repayment of the Total Amount Payable under clause 4.2, each payment made to Funding Circle by the Borrower in respect of the BBLS Loan will be applied:

  1. first towards repaying any arrears on the BBLS Loan; and
  2. second towards paying the Outstanding BBLS Loan Principal and Accrued Interest due in respect of the BBLS Loan in accordance with the Repayment Schedule.

2.5 If an Event of Default has occurred and Funding Circle demands full repayment of the Total Amount Payable under clause 4.2, Funding Circle will apply any recovery payments received in the following way:

  1. first, to the outstanding principal of the BBLS Loan until paid in full; and
  2. second, to the outstanding Accrued Interest until paid in full;
or otherwise as provided for in the BBLS Borrower Terms and Conditions.

3. Interest

3.1 The Borrower agrees to pay interest on the BBLS Loan at the Fixed Interest Rate outlined in the BBLS Key Contract Terms. Interest shall accrue at the Fixed Interest Rate on and from the BBLS Loan Completion Date to the date of actual repayment, and shall be calculated at the outset for the whole period of the BBLS Loan.

3.2 The Borrower will not be required to make any repayments against the BBLS Loan during the first 12 months of the BBLS Loan (the “BIP Period”), during which time the UK Government will make interest payments on the Borrower’s behalf. After the BIP Period, the Borrower shall make monthly amortised repayments comprising interest and principal to the Investor.

3.3 If a BBLS Loan repayment is not made in full on its contractual scheduled repayment date, or if there is an Event of Default and full repayment of the Total Amount Payable is demanded under clause 4.2, interest shall continue to accrue on the BBLS Loan at the Fixed Interest Rate and shall be immediately due and payable as it accrues. Interest at the Fixed Interest Rate, calculated on a daily basis, shall continue to apply to any Outstanding BBLS Loan Principal until all amounts due in respect of the BBLS Loan have been repaid in full. This interest shall accrue at the Fixed Interest Rate both before and after any court judgment obtained against the Borrower (computed at such intervals as Funding Circle shall decide).

4. Early repayment and termination

4.1 If the Borrower wishes to repay a BBLS Loan early, it may do so at any time after the BBLS Loan Completion Date. In such case, the Borrower must repay the entire Outstanding BBLS Loan Principal and all Accrued Interest, other than Accrued Interest to be paid by the UK Government during the BIP Period under clause 3.2, at the date of early repayment. It can do so by following the instructions in the Borrower Account. If a BBLS Loan is repaid early, the Borrower must pay Accrued Interest (if any) up to the next scheduled repayment date or, if a BBLS Loan is repaid fewer than eight days before the next scheduled repayment date, the Borrower must pay Accrued Interest up to the subsequent scheduled repayment date (and so will incur a further month’s interest). Early repayment of the BBLS Loan shall not entitle the Borrower to any rebate in amortised interest that has been paid or is owing to the date of settlement.

4.2 Each of the following circumstances is an Event of Default. Funding Circle may demand early repayment of the Total Amount Payable if any of the following Events of Default occurs or arises:

  1. the Borrower misses, fails to pay or does not make a full monthly payment when due under the BBLS Loan Contract;
  2. the Borrower has provided false information or has failed to provide any material information of which it is aware in a way which affects or would have affected the decision to allow the Borrower to register as a member of Funding Circle, the decision to approve the BBLS Loan Request from the Borrower;
  3. the Borrower has breached the terms of a BBLS Loan Contract (or those relating to a different loan on the Funding Circle Platform) or of any other loan or financing agreement to which it is a party, if either:
    1. notice has been given to the Borrower demanding repayment of the relevant loan or agreement; or
    2. Funding Circle has reasonable grounds to believe that as a result either the Borrower will also breach the terms of the BBLS Loan Contract (or any of them) entered into on the Funding Circle Platform or any of the other Events of Default stated in this clause will occur;
  4. the Borrower uses the proceeds of the BBLS Loan for a purpose other than providing economic benefit to its business;
  5. the Borrower's membership of Funding Circle is terminated for any reason under the BBLS Borrower Terms and Conditions;
  6. a petition is presented, or an order made or an effective resolution passed for the winding up or dissolution or for the appointment of a liquidator of the Borrower;
  7. the Borrower ceases to pay its debts or is unable to pay its debts as they fall due or is deemed unable or admits its inability to do so or makes a general assignment or agreement for the benefit of or a composition with its creditors;
  8. the Borrower ceases to carry on its business or a substantial part of its business;
  9. notice is given of an intention to appoint an administrator, a petition is filed or a competent court makes an order for the appointment of an administrator in relation to the Borrower;
  10. an encumbrancer takes possession or steps are taken for the appointment of an administrator or receiver or administrative receiver or manager or supervisor or sequestrator over the whole or any substantial part of the undertaking or assets of the Borrower;
  11. if the Borrower is a sole trader, the Borrower dies, becomes of unsound mind, becomes bankrupt or makes a voluntary arrangement with anyone that they owe money to;
  12. if the Borrower is a partnership, the composition of the partnership materially, in the reasonable opinion of Funding Circle, changes or any partner dies, becomes of unsound mind, becomes bankrupt or makes a voluntary arrangement with anyone to whom such partner owes money;
  13. if a claim by HM Revenue & Customs (or any other governmental department or agency or other public body) is, or is reasonably likely to be adversely decided against the Borrower and the Borrower does not meet any payment obligation relating to that claim within the required period;
  14. a material adverse change occurs in the financial condition or business prospects of the Borrower, or Funding Circle believes that the prospect of payment or performance of the liabilities of the Borrower to the Investor is impaired; or
  15. the Borrower is abusive or offensive towards any Funding Circle employees.

5. Funding Circle fees

As this BBLS Loan is supported by the UK Government, no fees are payable by the Borrower to Funding Circle.

6. Information undertakings

6.1 If the Borrower is, or at any time becomes, aware of any of the following circumstances, claims or potential claims, then the Borrower will promptly provide to Funding Circle full written details of the circumstances, claims or potential claims:

  1. circumstances (including without limitation any claims, undisclosed liabilities, litigation, arbitration, court proceedings or investigations which are current, threatened, pending or otherwise reasonably likely to occur against the Borrower by any third party) which could or might result in a material adverse change in the Borrower’s financial condition, business or assets; and/or
  2. any current or future claim (or potential claim, including (without limitation) if an investigation has commenced) by HM Revenue & Customs (or any other governmental department or agency or other public body) against the Borrower.

6.2 The Borrower shall, from time to time, on request from Funding Circle, provide Funding Circle with such information as it may require about the Borrower’s financial condition, business and affairs, and compliance with the terms of the BBLS Loan Contract.

6.3 The Borrower shall permit employees or agents of Funding Circle or other third party business advisory/audit professionals on reasonable notice and during business hours to attend and inspect its premises and any of the Borrower’s books, accounts and records and to make copies of any such information. The Borrower agrees to meet with any such employee, agent or third party professional within 21 days of request by Funding Circle, and answer all reasonable queries of such employee, agent or third party professional..

7. No reliance

The Borrower and the Investor confirm that, in entering into the BBLS Loan Contract, it has not relied on any representation, written statement, advice, opinion or information made or provided by, or on behalf of, Funding Circle. The Borrower and the Investor further each confirms that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with the BBLS Loan Contract.

8. General

8.1 The BBLS Loan Conditions and the BBLS Loan Contract (and any non-contractual obligation arising out of, or in connection with, the BBLS Loan Conditions and the BBLS Loan Contract) are governed by and construed in accordance with English law, and the Investor and Borrower each submits to the non-exclusive jurisdiction of the English courts.

8.2 The Investor may assign or transfer all or part of its respective rights and obligations under this BBLS Loan Contract, including to the Guarantor (as defined in clause 1.3). The Borrower cannot assign or transfer its rights and obligations under this BBLS Loan Contract.

8.3 Any security or personal guarantee attaching to any non-BBLS loan contract entered into between a Borrower and an Investor (or Investors), and pre-dating a BBLS Loan Contract, will not be relied upon by Funding Circle or any Investor in a BBLS Loan to support the Borrower’s obligations under that BBLS Loan.

8.4 If any part of the BBLS Loan Conditions that is not fundamental is found to be illegal or unenforceable, such finding will not affect the validity or enforceability of the remainder of the BBLS Loan Conditions or the BBLS Loan Contract.

8.5 Any waiver by either party of a breach of any provision of these BBLS Loan Conditions and/or a BBLS Loan Contract, or by any person on such party’s behalf, shall not be considered to be a waiver of any other or later breach of the same, or any other, provision.

8.6 Any notices to be given to the Borrower in relation to any BBLS Loan Contract shall either be put on the Borrower Account or shall be sent by email to the Borrower's email address; sent by post or courier to the Borrower’s address registered with Funding Circle or its registered office; or in any other manner deemed appropriate by Funding Circle. Any notices to be given to the Investor should be given to Funding Circle on the Investor’s behalf.

8.7 The records kept by Funding Circle shall be conclusive of the facts and matters they purport to record except if there is an obvious mistake.

8.8 If the Borrower is a sole trader, unincorporated body or general partnership with fewer than four members who are not all themselves corporate bodies, by entering into the BBLS Loan Contracts, the Borrower makes the following declaration:

Declaration for exemption relating to businesses (articles 60C and 60O of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001)

I am entering this agreement wholly or predominantly for the purposes of a business carried on by me or intended to be carried on by me/us.

I understand that I will not have the benefit of the protection and remedies that would be available to me under the Financial Services and Markets Act 2000 or under the Consumer Credit Act 1974 if this agreement were a regulated agreement under those Acts.

I understand that this declaration does not affect the powers of the court to make an order under section 140B of the Consumer Credit Act 1974 in relation to a credit agreement where it determines that the relationship between the lender and the borrower is unfair to the borrower.

I am aware that, if I am in any doubts as to the consequences of the agreement not being regulated by the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974, then I should seek independent legal advice.

8.9 If the Borrower is a partnership, by entering into the BBLS Loan Contract the Borrower makes the following declaration:

I confirm that I am authorised by the partnership to enter into this agreement for and on behalf of the partnership and that I am authorised by the partnership upon entering into this agreement to bind the partnership to the terms of this agreement.

8.10 The Borrower and the Investor each agrees that, while Funding Circle is not a party to the BBLS Loan Contract, Funding Circle is (unless the Borrower is notified otherwise by a back-up servicer, in which case the back-up servicer is) authorised to act on behalf of the Investor in relation to the BBLS Loan Contract and exercise and enforce the rights and powers of the Investor under the BBLS Loan Contract on its behalf and that it may also take the benefit of and specifically enforce each express term of the BBLS Loan Contract and any term implied under it which are for the benefit of Funding Circle pursuant to the Contracts (Rights of Third Parties) Act 1999. Funding Circle will not, however, be under any obligation to perform any obligations of the Investor under the BBLS Loan Contract.

8.11 The BBLS Loan Contract will be entered into by electronic means in accordance with the BBLS Borrower Terms and Conditions by the Borrower and the relevant Investor and this will have the same effect as if the BBLS Loan Contract was signed in a hard single copy.

9. Defined terms

In these BBLS Loan Conditions and the BBLS Loan Contract the following words have the meanings set out next to them in the table below:

Accrued Interest
any interest accrued on a BBLS Loan under clause 3 of these BBLS Loan Conditions.
Borrower
in the context of these BBLS Loan Conditions, a borrower under a BBLS Loan Contract or, as applicable, a person who is applying for BBLS funding through the Funding Circle Platform.
Borrower Account
the account which the Borrower holds with Funding Circle.
BBLS Borrower Terms and Conditions
the terms and conditions that govern the relationship between the Borrower and Funding Circle, as amended or replaced from time to time.
BBLS Key Contract Terms
a summary of the BBLS Loan information for the Borrower which forms part of each individual BBLS Loan Contract.
BBLS Loan
the loan borrowed by the Borrower from the Investor on the Funding Circle Platform pursuant to the BBLS Loan Request.
BBLS Loan Application
an application for a BBLS Loan made by or on behalf of the Borrower.
BBLS Loan Completion Date
the date on which all Funding Circle’s requirements in relation to the BBLS Loan Request have been satisfied and funds have been released to the Borrower.
BBLS Loan Conditions
these Funding Circle BBLS Loan Conditions.
BBLS Loan Contract
a loan agreement supported by the BBLS that sets out the terms of the lending arrangement between the Investor and the Borrower comprising the BBLS Key Contract Terms and these BBLS Loan Conditions.
BBLS Loan Principal
the amount the borrowed by the Borrower pursuant to this BBLS Loan Contract and as set out in the BBLS Key Contract Terms.
BBLS Loan Request
a Borrower’s BBLS Loan Application when accepted by Funding Circle and listed on the Funding Circle Platform.
Event of Default
any of the events or circumstances referred to in Clause 4.2 of these BBLS Loan Conditions.
Fixed Interest Rate
the interest rate outlined in the BBLS Key Contract Terms.
Funding Circle
Funding Circle Ltd.
Funding Circle Platform
the online direct lending marketplace platform operated by Funding Circle which facilitates lending and borrowing between Investors and Borrowers.
Investor
Funding Circle BB Limited, or any permitted assignee, transferee or other successor in title.
Outstanding BBLS Loan Principal
the BBLS Loan Principal minus any amounts of BBLS Loan Principal already repaid pursuant to clause 2 of the BBLS Loan Conditions.
Repayment Schedule
the schedule of loan repayments provided to a Borrower for its BBLS Loan.
Total Amount Payable
in relation to the BBLS Loan, the total amount of the Outstanding BBLS Loan Principal and all contractual interest due from month 13 (not including the UK Government’s Business Interruption Payment) to the end of the loan term (pursuant to clause 3 of the BBLS Loan Conditions) outstanding at that time.

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