The BVSC Debenture Scheme was set up to reduce the previous reliance on a Bank overdraft that the Club has used for several years over the winter period at significant cost, and to offer a way for members to receive a return on their investment that is advantageous to them, whilst costing the club less than the overdraft. Put simply the interest rate we pay on the Debenture is less than we are charged on an overdraft, and by offering a rate higher than the high street members benefit either in the form of a cash return and a reduction on their membership fees – with flexibility to increase the proportion taken as a reduction in fees.
The scheme is in line with the Club’s Memorandum and Articles of Association and many other sports clubs offer similar schemes.
Main Committee agreed the scheme at their May meeting and amended the details at their meeting in July to make it more flexible and attractive. The scheme now offers:
- Members the option to loan between £500 and up to a £5000 to the club. Debenture holders would receive interest of 2% above the base rate – paid annually. After 12 months they would receive a further 1% of their debenture as a reduction to their subscription for the following year.
- Members would have the option of either a 3 or 5 year term and may take all their interest as a reduction in their membership fees
- Debenture members would have no special rights in accordance with club rules
- Main Committee would review the rate of interest paid annually but would ensure the interest paid was less than overdraft fees so fully advantageous to the club.
- Members interested in the scheme would be provided with full details of the current financial position of the club, including the business plan.
Attached to this note is a copy of the Debenture Scheme agreement which can be tailored to the level of Debenture you want to take out, the period of the Debenture and the mix of interest or fee reduction you want. Also attached is a copy of the Club’s Business Plan outlining the challenges facing the Club including the current financial position – we make no secret of the fact that things have been difficult, but the accounts clearly show an improving position over the next few years. The Plan has been agreed by the Bank. The Club now has an agreed overdraft limit of £55,000 which ensures the Club’s survival without the Debenture scheme, but clearly if the scheme is successful we would not need to use the full overdraft facility this year – if at all. To be honest it depends on the level of interest shown by members.
Any Flag Officer would be happy to talk to you in more detail if you wish – if you have any specific questions please contact our Hon Treasurer, Richard Page (richardpage@nulltinyworld.co.uk). If, after reading this material and considering the scheme, you want to proceed please complete and return the attached application form to the Club, for the attention of Richard Page who will be happy to draw up an agreement in line with your wishes.
Thank you for showing an interest.
