Personal loan as a source of funds Tier 1 Entrepreneur

Sandra35 · Post by **Sandra35** » Wed Sep 16, 2020 1:38 pm

Hello, can an applicant rely on a personal loan as a source of funds towards the £200k investment? This would be invested in the business via a Director's loan.
For the initial application the applicant relied on third party funding.

Many thanks for your help

marcnath · Post by **marcnath** » Wed Sep 16, 2020 4:19 pm

Sandra35 wrote: ↑
Wed Sep 16, 2020 1:38 pm
Hello, can an applicant rely on a personal loan as a source of funds towards the £200k investment? This would be invested in the business via a Director's loan.
For the initial application the applicant relied on third party funding.

Many thanks for your help

Could you explain this better?

Is it a loan from the third party you showed at the time of application?

If it is different, what happened to the funds initially shown?

What do you mean my personal loan? Are planning to borrow from a bank, for example?

Sandra35 · Post by **Sandra35** » Wed Sep 16, 2020 4:54 pm

Hi, Thank you for your comments. Apologies for lack of clarity.

This loan was not mentioned at the time of the application.
At the initial application stage the applicant had all the relevant documents from a third party funder. He has not actually used the third party funds but had some personal funds which he has used as part of his £200k investment. (i'm not sure why he could not rely on his personal funds at the time, perhaps they had not been in his account for long enough but in any event they were not sufficient)

He is now short of funds to invest and has the possibility of a personal loan from a lender who is in fact a limited company based in Cyprus. The loan would be paid into his personal UK account. I appreciate this is not straightforward.

My worry is that the Guidance says that the funds should have been available to him at all times and if he's now taking out a loan that would say otherwise. On the other hand the Guidance seems to say that at the point of extension, the applicant essentially needs to show that they have invested the relevant £200k in the business.

Sorry this is so long but would appreciate any guidance

marcnath · Post by **marcnath** » Wed Sep 16, 2020 5:10 pm

Sandra35 wrote: ↑
Wed Sep 16, 2020 4:54 pm
Hi, Thank you for your comments. Apologies for lack of clarity.

This loan was not mentioned at the time of the application.
At the initial application stage the applicant had all the relevant documents from a third party funder. He has not actually used the third party funds but had some personal funds which he has used as part of his £200k investment. (i'm not sure why he could not rely on his personal funds at the time, perhaps they had not been in his account for long enough but in any event they were not sufficient)

He is now short of funds to invest and has the possibility of a personal loan from a lender who is in fact a limited company based in Cyprus. The loan would be paid into his personal UK account. I appreciate this is not straightforward.

My worry is that the Guidance says that the funds should have been available to him at all times and if he's now taking out a loan that would say otherwise. On the other hand the Guidance seems to say that at the point of extension, the applicant essentially needs to show that they have invested the relevant £200k in the business.

Sorry this is so long but would appreciate any guidance

So, this is for someone else?

You are right in that there is only the requirement to provide evidence of the actual investment.

However, there are a couple of subtleties.

1) One of the conditions of the visa award is that the applicant retains access to the funds UNTIL it is invested into the business (as you pointed out). There is no requirement to evidence that until the applicant is specifically asked for it as additional information. So it is just useful to have the evidence ready just in case.
2) The only evidence needed is to show transfer of funds from applicant to the business, and that would be satisfied by moving it from the personal account to the business account. However, HO has previously asked for the source of funds, which means they are interested in verifying that this is a genuine personal investment. There are no clear guidelines on what exactly they look for here.

Sandra35 · Post by **Sandra35** » Wed Sep 16, 2020 6:19 pm

Thank you for taking the time to respond, it's really appreciated.

Do you think that the loan could be a problem in that "available money has to be free of sanctions" and a personal loan by definition would have some sanctions in that at the very least it has to be repaid by a certain date or occur interest?

marcnath · Post by **marcnath** » Wed Sep 16, 2020 7:53 pm

Sandra35 wrote: ↑
Wed Sep 16, 2020 6:19 pm
Thank you for taking the time to respond, it's really appreciated.

Do you think that the loan could be a problem in that "available money has to be free of sanctions" and a personal loan by definition would have some sanctions in that at the very least it has to be repaid by a certain date or occur interest?

Yes, it could be

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Personal loan as a source of funds Tier 1 Entrepreneur

Personal loan as a source of funds Tier 1 Entrepreneur

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Re: Personal loan as a source of funds Tier 1 Entrepreneur

Re: Personal loan as a source of funds Tier 1 Entrepreneur

Re: Personal loan as a source of funds Tier 1 Entrepreneur

Re: Personal loan as a source of funds Tier 1 Entrepreneur