FREQUENTLY ASKED QUESTIONS
What is a Community Investor?
A community investor is an ordinary person or a community organisation making a financial investment in their community and wanting a ‘social’ return for their money as well as a small financial return.
What is a Community Bond?
A community Bond is a mini-bond. They are non-transferable, non-withdrawable and non-tradable as they are not listed on any market. Typically, they are unsecured and carry risk so a return on investment or capital is not guaranteed.
Is my investment covered by Financial Services Compensation Scheme (FSCS)?
Investments in these bonds are also not protected by the Financial Services Compensation scheme. Equally investors have no recourse to an ombudsman
Is my money at risk?
Like any investment, your money is at risk. You should therefore only ever invest as much as you are prepared to lose
How long can I invest my money for?
The minimum investment period is 3 years and the maximum of 7 years
Can individuals and organisations invest in a Community Bond?
Yes. Both individuals and organisations can invest
How much can I invest?
The minimum investment is £50, and the maximum investment is £5000
What happens if the Community Bond doesn’t reach its minimum financial target?
All the money received will be returned to investors (without interest)
When will I get my money back?
That will depend on how long you have invested your money for i.e. 3yrs/4yrs/5yrs/6yrs/7yrs
Can I get my money back earlier than the investment period I initially signed up for?
No. These bonds are not withdrawable earlier than the agreed investment period. This is a long-term investment. As such this investment is not suitable for those who require immediate access to their money.
Will I get all my money back?
The value of the bond cannot increase beyond its nominal value of £50. However, the bond value may fall if the BenCom makes a loss.
How much interest will I get back?
Interest rates will vary depending on the Community Bond offer you are investing in.
When will I get my interest paid?
At the end of the investment term, investors receive back their initial investment plus a lump sum of interest if the funds performed well. Any interest due to the investor will be paid at the same time as you receive your money back using simple interest formula.
Can a Community Loan Fund be established for my community?
Yes. SCF Ltd can work with any place based community or thematic community in Scotland that recognise the need for a Community Loan Fund.