Directors loan as an investment. Gurus please respond urgent

[Entreprenuersweare]

We had applied as a entrepreneur team on 12 December 2012 and were refused on the basis of no access to each other's funds as we have the funds in our personal accounts. We made an appeal against the decision. We are unable to open a joint acc in the UK or back in our home country. We are also not able to show access to each other accounts.

If we make a fresh application can we show all the funds in our business account as an investment in the form of a director's loan for our initial application.

Timeline
Applied - 12/12/12
Refused - 15/05/13
Appeal date - 27/11/2013

Please advise.

This is a point from the policy guidance

'The amount of money invested should not:
• include the value of any residential accommodation or property development, or property
management; or
• be in the form of a director’s loan, unless it is unsecured and is subordinated in favour of
the third-party creditors.'


'iii) Director’s loan
If you have made the investment in the form of a director’s loan, it must be shown in the relevant
set of accounts provided, and you must also provide a legal agreement, between you (in the
name that appears on the application) and the company.
This agreement should show:
• the terms of the loan;
• any interest that is payable;
• the period of the loan; and
• that the loan is unsecured and subordinated in favour of third-party creditors.
If it is not clear from the information provided that the loan is unsecured and subordinated in
favour of third-party creditors, we will not accept the loan for the award of points'

Please advise.

[John]

Isn't it clear? The Director's loan needs to be "unsecured and is subordinated in favour of the third-party creditors" and "you must also provide a legal agreement, between you (in the name that appears on the application) and the company".

[Entreprenuersweare]

Isn't it clear? The Director's loan needs to be "unsecured and is subordinated in favour of the third-party creditors" and "you must also provide a legal agreement, between you (in the name that appears on the application) and the company".

Hi John

Thank you for the quick response.

What I am trying to clarify is whether you can show all funds as invested in business because I have noted on the forum that it is said to be a complicated process. Also I have been told that this can only be done at the time of extension and not for the initial application for switching from another category.