Loanstock FAQ

What’s loanstock?
Loan stock is the term we use for money invested in a co-op by external parties. There are other methods for such parties to invest, but one of the advantages of loanstock is that it cuts out intermediary services and their cost, so the full amount goes directly into the co-op.
The system is best described as a type of ‘fixed-term investment’ – this means people lend money to the co-op for a fixed period of time. The co-op pays interest to the loan stockholder, and Redcurrant will issue an extra loan stock certificate to cover this interest each year.
At the end of the set period the investor is paid back in full, including the interest.
The co-op does not deduct tax from the interest – it is the investor’s responsibility to declare the interest in a tax return. If anyone receives more than £250 interest in a year, the co-op is legally obliged to make a special declaration to the local tax office. The loan stock is an unsecured investment.

Why not go to a bank for the loan?
One of the advantages of loan stock is that it cuts out intermediary services and their cost, so the full amount goes directly into the co-op. Furthermore, we would prefer to pay interest to our investors who support what we are doing and want us to succeed.

Why should I invest my money?
By helping to set up a housing cooperative, you are using money to change the housing market.
You are helping create long-term, affordable and secure housing which won’t be sold off for private gain. Unlike banks and other forms of investment, we are 100% transparent with your money and you will be kept up-to-date with how your money is being used.

What will my money be used for?
The first priority is for us to secure the property. Money which exceeds this cost will be used to make any necessary renovations when we move in. You can find out more about our plans for the house beyond it being a home by reading our secondary rules. If you’d like to have a look at them, feel free to send us an e-mail.

Can I decide to withdraw my investment whenever I want?
Investments will generally be returned with interest at the end of the term you initially choose.
We will consider all requests for early withdrawal of an investment and may return the invested money with interest accumulated if it is financially viable for the cooperative. There is no guarantee that we will be able to fulfil these requests.

Do I get interest?
Yes (if you want). On the loanstock application form you can choose how much interest you would like to receive (0-3%). When we receive your application we may get in touch to see ask whether you are able to shorten or extend the term based on the interest you ask for.

How and when will interest be paid?
Interest will be paid on the 31st December each year, or at the end of the term of the loan, i.e. when it matures.

Why is the loanstock unsecured? Does that mean I won’t get the money back?
In short, no it doesn’t mean that. ‘Unsecured’ means that the cooperative does not offer
investors any collateral against the loan. However, In the unlikely event that things do go wrong and the cooperative fails or defaults, it is very likely that the house would be sold in order to repay investors. This is an extremely rare occurrence among cooperatives. As a model they have an excellent track record.

I’m not sure if I want to invest, can I make a donation instead?
Yes. If you’re not interested in investing for whatever reason, you can also make a donation.
Please get in touch via e-mail if this interests you.

I’d like to invest, what do I do now?

Great! First thing to do is fill out a loanstock application form and send it to:
Redcurrant Housing Co-operative Ltd
5 / 8 St. Leonard’s Street
Edinburgh
EH8 9RN
Then we’ll get in touch to finalise the agreement and organise a bank transfer.

How can I get more info?

Get in touch with any question at redcurranthousingcoop@protonmail.com