Our Assessment
Making sound investments for the economic benefit of Shetland is our most important responsibility. Every application and project that we assess must undergo due diligence and to help in this process, we follow set guidelines and other considerations. For example, we only consider applications that relate to, are located in, or agree to locate in Shetland and can demonstrate a tangible economic benefit.
The size of the application is also important and we generally handle loans exceeding £15,000, as other lenders are generally better equiped to handle smaller investments.
Generally, we will not exceed 75% of the project costs and we expect the applicant to demonstrate significant personal commitment either in the form of capital, equity or in the form of services or facilities to which a significant value can be attributed.
Part of the due diligence process is to assess the assets available to the Trust for securing the lending. The security available will form a large part of the assessment of risk which will in turn determine the interest rate applied to the investment. Once an interest rate has been set it remains fixed for the loan period.
The loan period will depend on the project's requirements, however, the usual term is a maximum of 10 years. The Trust can offer interest only periods and interest capitilisation periods but it is stressed that the project must demonstrate need for such conditions if they are to be applied.
If we consider our criteria to be satisfied the project under consideration should meet the investment selection standards. These standards are based on return on capital (ROC), state aid regulations, and the agreement and formalisation of security and ranking agreements.