Hi Arborman
Thanks for your question.
Here are some points which together should answer in full:
* Obviously we don't know what we are going to raise through this share offer. Our maximum loan from a bank will be £350k, but it might well prove that such a loan (or a loan of that amount) is unecessary (especially with 150 downloads of the application form with in 48 hours!!). However, all our parameter in the plan are 'worst case scenario', so a loan of £350k is assumed. IF THIS LOAN IS PAID OFF EARLY IT WILL NOT BE THROUGH PROFITS BEING CHANNELLED TO DO SO, BUT THROUGH FRESH SHARE OFFERS. The Society has the right to conduct fresh share offers as it sees fit, to bring in more capital. In this way, bank loan would be replaced by share investment, which will doubtless be comparatively easy to secure on a second or third time round as investors see the Society up and running well.
(Early repayment of such loans is almost never a good idea unless there is fresh money arriving to do this)
* The 15 year repayment schedule and the 5% rate cited in the plan were again, worst case scenarios. We have now bettered them to the extent that our projected repayment schedule of both interest and capital has been more than halved.
* The £35k investment in external building maintenance (pointing, stone protection, repainting etc.) is quite flexible in that it can be a gradual investment, perhaps over 2 years for example. We chose to put it in year one of the plan, again testing our figures out deliberately by making conditions the most unfavourable to see if the project was still viable.
* It is normal, I think, that interest on shares is only paid at the end of a trading period. i.e. starting after the first financial year for the Society
* There will be quite a lot of flexibility as expressed through shareholders' votes in the AGM. For example people may vote to have new loos, or they may vote to have more return. The aims of the Society will always be 1/to service and honour any loan 2/to protect shareholder investment and where possible pay attractive rates of interest 3/to ensure the ongoing viability and value of the business. The balance between these aims may be subject to Members' opinions as expressed in voting procedures, but they are not mutually exclusive... in fact they are complementary aims, each contributing to the others in many ways.
* Despite making a rod for our backs with worst case scenario figures, the spreadsheets we have worked on suggest that our aims are entirely plausible.
Do please ask for more info. if that has not cleared up your points
Thanks
Patrick