CIC Association

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What does this mean in Layman's terms? A guarantee company can borrow money and may issue debentures or debenture (loan) stock?

Hello Everyone,

I posted that question on my wall and John Mulkerrin kindly responded. I then asked another question and John invited me to post the thread as a discussion for posterity and other's who might have similar questions. 

I'm going to copy/paste our initial questions/comments for context:

What does this mean in Layman's terms? A guarantee company can borrow money and may issue debentures or debenture (loan) stock? 

Comment by John Mulkerrin 
Basically its a fancy type of loan, rather than just taking an ordinary loan with the bank who state the terms (interest,term etc) the CIC can make its own proposal to potential supporters. IE A five year deal with 1% interest (getting someone to support depends on the individual circumstances)

Comment by Bret Warshawsky 

Thank you very much for the reply, that is very helpful. Do you happen to know (if there any specific laws) if there is a cap or regulation on how much interest can be given? Is that flexible? Within the context of the CIC being for the community and not for profit, how generous can we be towards an investor/supporter with interest? 

Comment by John Mulkerrin 
What context are you coming from? Do you understand the Performance loans rules?

Comment by Bret Warshawsky 
The context I am coming from is being part of an inchoate CIC (limited by guarantee) that we have set up but not acted upon much yet. We created that from our intuition and now need to learn more about the details before moving forward. So we are all basically neophytes, one of our team members has extensive accounting experience and another extensive 'business experience' but the ins/outs, minutiae and granularity of operating a CIC is rather novel for us. I don't think any of us are up to speed on understanding Performance Loans rules.. in the other forum, I'll be sure to ask if you can talk about that some and/or point us towards some resources to read up on it. Thank You John again, for the invitation to post in the forum, I'll be doing that in a couple of hours.  

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Replies to This Discussion

there's a good plain-english guide to the different types of financial investment options in the free pdf document 'simply finance' produced by co-opsUK and others: 

Thank you Adrian, we appreciate it. 




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