INFORMATION FOR BORROWERS

What are the benefits of having my loan guaranteed by the Fund?

If the Fund agrees to guarantee your loan this reduces the credit union's risk, and allows it to lend you money at a lower interest rate. The credit union may also be willing to increase the amount it lends to you if all or part of the loan is guaranteed. Also, if you are a young person with no credit history, a guarantee from the Fund may help you qualify for a loan that you might not have been able to get otherwise. Proper repayment of the loan to the credit union will make it easier for you or your business to get credit in the future.

How much could I borrow?

The CCEC credit union will determine the maximum amount it will lend to you. At present, the maximum amount that the Fund will guarantee is $10,000 for any single loan.

Who is eligible to apply for a loan guarantee?

To be eligible to apply for a loan guarantee an individual applicant must demonstrate that he or she has been a resident of Galiano for at least six months or has a long-standing association with the island, and that he or she plans to continue living and working here.

Galiano organizations as well as individuals may apply for a loan guarantee.

What do I have to do to make an application?

Filling out the application form is the first step.

You will need to describe how you intend to use your loan money and how you intend to pay it back. For some types of small loans we may simply ask you to verify your income and/or employment to demonstrate your ability to repay, but in the case of a significant business loan we would want to see your business plan. You should also provide several local references.

In addition, we will ask you to demonstrate a personal commitment to your project by providing a description of the time, personal funds, tools, equipment and/or materials that you will contribute to the project's success.

As a condition of approval for your loan guarantee the Fund may also ask you to work with a business advisor or mentor to help you keep your business and repayment plans on track.

Once your loan guarantee is approved, you will be asked to sign the Borrower’s Agreement, which will be countersigned by a representative of the Loan Fund Society.

Is applying for a guarantee the same as applying for a loan?

No. You will still need to go to CCEC and apply for the loan itself. Because a credit union is a co-op, you will also need to become a member and buy shares in the credit union at a nominal cost if your loan is approved. The interest rate that you will pay on your loan and the repayment terms will be determined by CCEC, and you will make your loan payments to them.