Loan Note Scheme – FAQ’s
In response to requests to provide a short summary of freqently asked questions on the Loan Note Scheme, KHIST have now provided a list of frequently asked questions about the Loan Note Scheme, or alternatively you can download a PDF of the FAQ’s by clicking here.
Loan Note Scheme – FAQS
What is the Loan Note Scheme?
The KHIST Loan Note Scheme has been set up to enable KHIST to raise a sum of money to provide funding to Kidderminster Harriers FC in response to the Club Chairman’s request for investment in the Club and a place on the Club’s Board. Supporters are being offered the chance to subscribe to the Scheme in multiples of £100.
What happens if I can’t afford £100 or more?
Two or more people can club together and make a joint loan to KHIST, although only one of those people can be registered as being the lender of record, and the agreement between those people will be a private one for which KHIST can take no responsibility. Alternatively arrangements can be set up with KHIST to pay small amounts monthly by standing order until enough money is accrued to purchase a Loan Note.
All supporters can become members of KHIST by paying the annual membership fee (£1 individual, £30 corporate). In addition KHIST will gladly accept donations of any size. All administration costs are being kept to a minimum and we hope KHIST membership fees, and other fund raising schemes will cover them. This, we hope, will enable a substantial proportion of cash donations to go into KHIST’s funds alongside the Loan Fund. However, none of the rights of members can be given to those who make donations but are not members of KHIST.
What benefits do I get for my loan?
The main benefit you get is to play your part to enable the supporters to invest in their club and effectively be significant players in the future of Kidderminster Harriers.
What additional benefits do I get for lending more money?
Every extra £100 will take us nearer to our goal of investing in Kidderminster Harriers Football Club and securing a voice for supporters in the running of the club.
What will happen to the money that I lend?
Initially, the money will be placed on deposit in a bank account set up specifically for the Loan Note scheme and will be used only for the purpose of the scheme.
Will I get a say in how the Loan Fund will be spent?
Yes. If the KHIST Board negotiates an opportunity to purchase shares and gain a place on the Board of Kidderminster Harriers Football Club, KHIST will seek permission of the Loan Noteholders to proceed. The proposed deal will be put to a vote of all Loan Note holders for approval before any money is actually committed.
Do I need to be a member of KHIST to be a Note holder?
Yes. Noteholders are required to be members of KHIST. In the event that a Noteholder’s membership of KHIST ceases, such Noteholder shall have no voting rights.
If KHIST buys shares in the club, does that mean that Noteholders each own shares in the club?
No. The shares would be owned collectively by KHIST for the benefit of all its members who pay their annual membership fee. As a Loan Fund Noteholder you will also be a member of KHIST. The Loan that you have made will not give you any greater ownership of Kidderminster Harriers Football Club than any other member of KHIST.
How will I have a say in the running of Kidderminster Harriers Football Club and who will represent the supporters at KHFC Board level?
KHIST has a Board that manages its activities. The KHIST Board are elected by the members in general meeting in accordance with the rules. The Loan Note Holders are able to elect 2 KHIST Board members. In the event that KHIST obtains a place on the Board of Kidderminster Harriers Football club, one of these people will represent the interests of the members of KHIST as conveyed to them at:-
(i) Society Board meetings
(ii) General meetings of the members of KHIST
If Kidderminster Harriers are successful in future years and KHIST’s stake becomes worth a lot of money, could we sell our shares and distribute the profits?
It would be possible for KHIST to sell some or all of the shares it buys in Kidderminster Harriers Football Club, although this would be contrary to the principles of the supporters’ investment in the club that KHIST is trying to establish. If the entire shareholding were sold, the cash received by KHIST would be used to repay Loan Note holders and any surplus would be distributed to Loan Note holders in proportion to their holding in the scheme. It must be stressed that this is only a very remote possibility.
Will I be able to get my money back once invested in the scheme?
An opportunity to redeem Loan Notes is available annually on receipt of notice in accordance with the terms and conditions of the scheme. Loan note redemption will be at the discretion of the KHIST Board and dependant on funds being available. For example, if the KHIST Board were in negotiations to invest in the Club then funds would not be available for redemption purposes at that time. Once the funds generated by the scheme have been invested in KHFC there may be procedures in the future whereby the loans may be repaid, but this is unlikely in the short or medium term, if at all. It should be noted that no interest will be paid on the Loan Notes.