WHAT IS LOANSTOCK?
Loanstock is a type of direct investment you or your organisation can make in Mara Co-op. Once you let us know that you’re interested in supporting us with loanstock, we will get in touch with you to discuss the details.
Loanstock is similar to an unsecured loan in the sense that you will provide us with a certain amount of money over a fixed term, and each year interest is accrued on top of the amount we owe you. At the end of the fixed period, we will pay you your original sum, plus all interest accrued over the period. Another option is that we pay you the interest each year, and return your initial sum at the end of the period. It’s up to you what you’d prefer!
…Basically, you help us buy the place, and we pay you back afterwards, with a little bit extra on top as thanks for your generosity.
Interest rates and length of the loanstock term can be negotiated, and we are happy to consider any application. Typically loanstock durations vary from 5 to 10 years, and interest rates vary between 0 and 4%. 0% would be for the kind of person who wants to support the project, and doesn’t need a return on investment beyond their initial money. Feel free to get in touch if you feel like you or your organisation may be able to offer some money as loanstock.
Once we’ve come to an agreement on how much, for how long, and at what interest, we will accept your loanstock application, receive the money from you, and issue you with a Loanstock certificate. A Loanstock certificate is proof of our agreement and is a legally binding obligation on our part to repay you under the terms specified. We’ll both have a copy, so if you ever lose it we’d be happy to send you another copy.
There are certain periods that Mara Co-op are allowed to issue loanstock, and therefore take loanstock money from you.
We are open to receiving loanstock applications from 1st of August 2025 and we will be closing on the 1st of August 2026. We are issuing up to £350,000 of loanstock. Here is a look at our Loanstock Application Form.
Why haven’t I heard of loanstocks before?
There’s not all that many Fully-Mutual Housing Co-operatives in the UK just yet, and there aren’t any in Aberdeen!
It ‘s common practice for Housing Co-operatives to rely on loanstock as a means of raising startup capital, and we are no exception. Although we do believe that we’ll get a decent amount of donations and grant funding, we don’t want to count our eggs just yet. As such, we are very interested in hearing from you if you are considering loanstock.
How do I know what you’ll spend the money on?
It’s a legal obligation of ours to be open about what the loanstock we are accepting will be spent on. In this case, we will purchase a property that can be used as affordable housing and a community space for grassroots organisations.
It is written into our primary rules that we are a not-for-profit, meaning that any surplus we make must be utilised furthering our aims and values. As such, we will spend any surplus by investing in resources for our community spaces, purchasing assets for community use, or supporting community groups with grants and donations.
Once established, we expect that we will be in the position to provide a significant amount of funding every year for community groups. This money will go to supporting community groups and the Aberdonian grassroots in perpetuity.
What happens if I need the money back sooner?
Good question! If you require early repayment of your loanstock for any reason, we would like you to get in touch with us so that we can discuss options for getting money back to you. You will see written on your loanstock application and certificate terms relating to early repayment. Although we are under no legal obligation to pay you back early, if we are in the position to do so we will. And if we can’t pay you everything back early, we will do our best to make things right.
How do I know you can afford to pay it back?
We have a developed a comprehensive business plan which includes how much we expect our project to cost, how much we expect to take in from rental income, and our estimated balance for the years ahead. We were very careful when it came to the business plan – it is as close to a worst-case scenario as plausible (no volcano insurance included unfortunately). As such, we’re confident that we can afford to pay back the loanstock you will be entrusting with us.
If we’re getting close to the deadline for your loanstock and we’re unable to pay it back, we have a variety of options. These include opening for more loanstock to repay yours, refinancing either directly with you or through a third party, or other fundraising measures as detailed in our business plan.
Rest assured, our number one priority in the early years is to ensure that Mara Co-op is financially viable. If Mara co-op is to be a support network for Aberdonian communities in the years ahead, it must be sustainable as a project. That includes playing you back!
While we can’t promise that you will get your money back – it’s literally illegal – we are confident in our business plan, strategy, and the benefits that this project offers to members and our shared communities.
What happens if you go bust or something?
While we see this as an unlikely outcome, we have a procedure written into our primary rules that explains how that would go. See a brief summary of that procedure below:
If Mara Co-op dissolves, all of our assets and debts will be counted up – debts in this case include your loanstock. Our assets will be sold and the money from that will be used to repay our debts. If there is any money left over after all of the debts are paid, then the remaining money will be donated to one of our beneficiaries, which, by law, is another co-operative non-profit who shares our values and aims. Our beneficiary is Radical Routes. See more about them on their website: https://www.radicalroutes.org.uk/
Under no circumstances will members have access to a single penny of it, and any excess in the case of dissolution would go to organisations with our shared aims.
While we can’t promise that you will get your money back – it’s literally illegal – we are confident in our business plan, strategy, and the benefits that this project offers to members and our shared communities.
I have another question?
Great- Contact us and we’ll gladly answer it!