FREQUENTLY ASKED QUESTIONS
What is a Community Investor?
A community investor is an ordinary person or a community organisation making a financial investment in their community and wanting a ‘social’ return for their money as well as a small financial return.
What is a Community Bond?
A community Bond is a mini-bond. They are non-transferable, non-withdrawable and non-tradable as they are not listed on any market. Typically, they are unsecured and carry risk so a return on investment or capital is not guaranteed.
Is my investment covered by Financial Services Compensation Scheme (FSCS)?
Investments in these bonds are also not protected by the Financial Services Compensation scheme. Equally, investors have no recourse to an ombudsman
Is my money at risk?
Like any investment, your money is at risk. You should therefore only ever invest as much as you are prepared to lose.
Will I get a regular income from my investment?
If you wish to receive a regular income from this investment, then this is NOT the right investment for you.
How long can I invest my money for?
The investment period is determined by the Community Bond scheme that you are investing in. The bond prospectus should specify the investment period(s)
Can individuals and organisations invest in a Community Bond?
Yes. Both individuals and organisations can invest
How much can I invest?
The minimum investment and the maximum investment is determined by the Community Bond scheme that you are investing in. The bond prospectus should specify the minimum and maximum investment you can make.
What happens if the Community Bond doesn’t reach its minimum financial target?
This will be determined by the Community Bond scheme that you are investing in. The bond prospectus should specify what will happen in the event of the bond being undersubscribed.
When will I get my money back?
That will depend on how long you have invested your money for.
Can I get my money back earlier than the investment period I initially signed up for?
No. These bonds are not withdrawable earlier than the agreed investment period. As such this investment is not suitable for those who require immediate access to their money.
Will I get all my money back?
The face value of each bond cannot increase beyond its nominal face value. However, their value may fall if the project makes a loss and bonds may be repaid at a lesser value than the face value as determined by the balance sheet at that time. In the event of a successful project, you will receive your full capital back along with any interest due.
How much interest will I get back?
Interest rates will vary depending on the Community Bond offer you are investing in.
When will I get my interest paid?
At the end of the investment term, investors receive back their initial investment plus a lump sum of interest if the funds performed well. Any interest due to the investor will be paid at the same time as you receive your money back using simple interest formula.
Should I seek independent financial advice?
All investments are a risk so depending on the level of investment and the level of risk you may wish to consult with an independent financial adviser.
Can a Community Bond be established for my community?
Yes. SCF Ltd can work with any place-based community or thematic community in Scotland that recognise the need for a Community Bond.