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Foundation East

Foundation East - CITR Withdrawable Shares

£50 minimum

Risk factors

An investment in Foundation East should be seen as a social investment. The investment is at risk and past performance is not a guide to future performance. Investors are strongly advised to verify all material facts and information

This offer is not covered by the Financial Services Compensation Scheme.

General investment risks

General risks include:

  • An investment in community shares is an investment in a trading business, not a loan or a deposit.  Your shares are withdrawable after 5 years, but are at risk so having your money returned cannot be guaranteed.
  • As a member and shareholder of Foundation East you could, if Foundation East is unable to meet its debts and other liabilities, lose some or all of your investment held in shares. However, your liability is limited to the amount that you have paid for your shares.
  • Your investment will receive a Tax Relief but does not enjoy any capital growth.

Compensation Scheme

The money paid for shares is not safeguarded by any depositor protection scheme such as the Financial Services Compensation Scheme (FSCS).

Foundation East is not an authorised institution under the Financial Services and Markets Act 2000 or deposit protection scheme for investors.

The withdrawable shares are a risk investment for the purpose of the relief of poverty through the promotion of enterprise. The issue of shares by Foundation East does not constitute an offer to the public under section 85 Financial Services and Markets Act 2000 since it is not an issue of transferable securities nor is it a Controlled Investment by virtue of paragraph 16(3) of schedule 1 of the Financial Services and Markets Act 2000 (Financial Promotion) order.

Note that the shares are not tradeable and the full value would not be returned if the risks to income described were to materialise.

Foundation East has a strong balance sheet and income from its existing loan book. It has always paid back money invested or lent in accordance with the relevant terms of its facilities and will take any commercially practicable steps to protect the investment made under this share offer.

Bad Debts

Foundation East may acquire bad debts which are greater than forecasted.

The Directors will seek to mitigate these risks through prudent management policies in Foundation East.

Foundation East has established loan procedures that will seek to target bad debt write-offs at a figure which will be covered by income generation on the loan book and the Enterprise Finance Guarantee.

Bad debts incurred have either been covered by surplus generated or grants received from public sector support, e.g. The Regional Growth Fund and Enterprise Finance Guarantee.

Insufficient Revenues

Foundation East may not earn sufficient income to pay for its running costs

Foundation East seeks to generate sufficient funds from interest and fees charged for the provision of loans, (both from its own book and from contract delivery) and from letting properties to cover all ordinary and anticipated overheads except bad debts.

Inability to lend within CITR timeframes

Foundation East is unable to lend the money raised within 18 months to comply with CITR rules

Demand for loans from businesses unable to meet the lending requirements of the banks and other alternative funders is strong across the Eastern region.

Foundation East has an experienced team who would increase marketing activity should the money not be lent within time frames.

CITR accreditation

Foundation East ceases to be accredited for Community Investment Tax Relief, reducing the tax relief to an investor.

Foundation East will seek to ensure that its lending activities from amounts invested through this share offer meet the terms and conditions of accreditation and the tax relief by regularly monitoring compliance against those terms and conditions

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