BOND. 6% pa. Quarterly Returns. Your Bond and Innovative Finance ISA Information Brochure

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1 BOND Your Bond and Innovative Finance ISA Information Brochure 6% pa Quarterly Returns

2 Three ways To Start Your Application Online By Phone By This brochure has been issued by Fluid ISA Bond 1 Limited and approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 by Northern Provident Investments Limited which is Authorised and regulated by the Financial Conduct Authority. (FRN:647948). Fluid is a trading name of Fluid ISA Bond 1 Limited, registered at: 6th Floor, 49 Peter Street, Manchester, M2 3NG. Registered in England and Wales, company number: You can find out more about Fluid ISA Bond 1 Limited in the subsequent brochure or by getting in touch. Phone , bonds@fluidisa.com, or visit: Your Fluid Bond is subject to changes in value with developments in the economic climate, and all yields are estimates which may fluctuate depending on the market. Tax regulations are also different for each investment, and it is important to feel confident in an ISA s suitability before you choose to pursue it further. Speak to an ISA specialist if you require further clarity FLUID.

3 What You Need To Know About The Fluid Bond Your Investment Steps This brochure outlines the key features of the Fluid Bond and the Fluid Innovative Financial ISA otherwise known as the Fluid ISA and is designed to offer you a comprehensive overview of what the Bond entails and how it works. You should find almost everything you need to know about the Fluid Bond and the ISA in the following pages, but bear in mind that any Bond is an investment that requires serious thought. To determine that the Fluid Bond is the right financial option for you, be sure to carefully read this brochure in full and all accompanying documents, and speak to an Independent Financial Advisor specialist for advice and support. For more information, contact Fluid via phone on , us on bonds@fluidisa.com, or visit Read this brochure closely, including the sections on risk and the terms and conditions. If quarterly interest payments of 6% fit your requirements, the Fluid Bond may be a great option. To begin all you need to do is complete the sign-up forms and provide a copy of your ID and address. 3 You can get the sign-up process started at or via phone on

4 Introducing the Fluid Bond The Fluid Bond offers regular quarterly interest payments of 6%, calculated per annum. This rate is fixed for the three years in which the bonds are held. Bonds are issued by Fluid ISA Bond 1 Limited and the Fluid ISA is operated by Northern Provident Investments Limited an ISA manager Authorised and regulated by the Financial Conduct Authority. Every investment is different and comes with an element of risk, so you may wish to seek independent financial guidance before deciding to invest money into a bond through an ISA Contents A Note from The Managing Director The Fluid Bond Why choose the Fluid Bond? How your Fluid Bond works A Fluid Process Keeping your Investment safe More from our Managing Director Project Overview Bond Raising through Fluid ISA Bonds backed by legal expertise The Fluid Business Model The Fluid Approach A Final Word from our Managing Director We are Fluid Meet the Directors Partner Showcase Frequently Asked Questions Risk Factors and Further Information

5 Dear Investor It is our pleasure to announce the launch of Fluid s Bond Issue. The Fluid Bond enables bondholders to earn regular income every quarter, calculated at a fixed rate of interest (6% per annum) for three years and hold the investment through an Innovative Finance ISA. In this brochure, you ll find more information about the bonds, how the ISA works, and what to expect if you choose to invest. Thanks for reading, Ansar Mahmood Managing Director 8 9

6 The Fluid Bond The Fluid bond differs from other bonds in two main ways. First, the investment comes with an attractive interest rate of 6% per annum fixed for the three years in which the bonds are held. Second, It can be held through an Innovative Finance ISA (IFISA) and delivers interest payments on a quarterly basis in contrast to most ISAs that work annually. Here s a breakdown of what you could earn: Interest Rate 6% Annual Management Charge (AMC) 0% Interest Payments Every Quarter RANKING INTEREST TOTAL RETURN 10,000 20,000 1,800 3,600 11,800 23,600 30,000 5,400 35,400 *Quarterly interest payments calculated at 6% per annum on investment amount. Financial estimates subject to change. 6% tax-free* annual returns over three years Term: Three Years Total Return: 18 % Minimum Investment Only: 2,000 *ISA Bondholders do not pay tax on any of the interest they receive on ISA investments, nor do they pay tax on capital gains arising on ISA investments, 10 subject to the tax-free investment allowance of 20,000 per annum. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. 11

7 Accessible Why Choose The Fluid Bond? Accessible Responsive There are ZERO hidden charges involved, and a minimum investment of just 2,000 is required to get started You can manage everything online via your own dedicated investment portal Responsive We assess your applications quickly and effectively, with prompt communication throughout You receive tax-free regular interest payments of a generous 6%, every quarter Dependable Our diverse, asset-backed portfolio offers security to Fluid ISA investors Fluid is led by a team of highly experienced finance industry leaders Dependable 12 13

8 How Your Fluid Bond Works A Fluid Process When you purchase a Fluid bond, your money is invested in the BondCo, which will lend the funds to the LendCo (Fluid Lending Limited), which will provide bridging loans to other companies, secured on the assets of these organisations. 1 You invest in the Fluid bond. What You ll Receive Your Own Personal Account Manager A dedicated personal account manager will be assigned to your case to offer you guidance throughout, answering any questions you may have. Exclusive Online Access Retain complete visibility over your investments using the online platform. Excellent Potential Returns Enjoy an 18% return at the end of the term Fluid then loans to a lending company (Fluid Lending Limited) in order to fund their business. This company repays the loan to Fluid Lending (the project funder) with interest on top. Fluid pays you interest every quarter and, at the end of the three-year term, repays your original investment. By this time, you could have earned 18% in interest on your original investment

9 Keeping Your Investment Safe Fluid ensure that all funds raised from the bond are asset-backed, helping to keep your investment safe. Asset-Backed Investments* The lending capital by the LendCo provides bridging loans that are used for exciting projects across the UK all of which are secured by their asset-backed nature. Effective Due Diligence All attempts are made to protect every penny of investors money including a thorough due diligence procedure which subjects Fluid Lending to strict criteria. This ensures they are equipped and suited to be part of the project. In the rare instance of insolvency, Fluid Lending would be able to make repayments via accumulated profits, loan security asset sales, loan capital repayments, and company asset liquidation. *The fact that the bond is asset backed would not guarantee that all capital would be repaid. This also means that there is a liquidity risk and there is likely to be a delay in repaying your capital should you request it

10 Dear Investor With the perception that high-street banks and other traditional lenders are slowing down the rate at which they are willing to lend, the need for bridging providers has never been greater. We at Fluid believe that within the current lending arena there is room for a highly professional, quality-driven player. We believe that player is us. Please read on to find out more about how the project works when you become a Fluid Bond investor. Ansar Mahmood Managing Director 18 19

11 Project Overview Lending It s becoming more difficult in the current climate to obtain a loan which is placing greater emphasis on the need for a quality bridging provider. That s where Fluid Lending come in. One of the major considerations for clients when choosing a bridging lender is how quickly these transactions can be completed. The interest rates are reflective of this requirement, as well as the short-term nature of the loans. Borrowing Fluid Lending have created a streamlined and highly scalable selection process which starts with an application to collect all the necessary information. A dedicated member of the Fluid Lending team will fully understand the borrower s business, building and maintaining a working relationship throughout. All lending decisions are subject to a Red Book valuation provided by a member of the valuation panel, with lending capped at 70% Loan to Value (LTV) at the 180-day value of the security. Borrowers are introduced to Fluid Lending by a large network of brokers who will be paid a procurement fee of 1% of the loan value. Individual loans to borrowers typically range between 100,000 and 1million and will all be backed by real estate acting as security, on either the purchase property or other properties which the borrower owns. Interest rates for bridging loans can, typically, range from 0.5% to 2.5% based on many factors including Loan to Value and risk. Fluid Lending believe that it can remain competitive and offer a greater level of continued service to it s borrowers. It is envisaged that average interest rates charged will be around 1.25% per month. Whilst this is slightly higher than the industry average of 0.83% per month, it will be justified by having a turnaround time far lower than the industry average of seven weeks. Fluid Lending Numbers Year 1 Financial Projections Target Fund Utilisation: 20,000,000+ Turnover: 1,200,000 Current Assets: 18,380,000 Returns To Investors: 430,000+ Company Profit Before Tax: 108,

12 Bond Raising through Fluid ISA Fluid wanted to offer investors an exciting opportunity to invest in an Innovative Finance ISA Mini-Bond, managed through a third-party bond ISA Manager (Northern Provident Investments Limited). The IFISA is run by Northern Provident Investments Limited (NPI) under the Fluid ISA brand. NPI are Authorised and regulated by the Financial Conduct Authority, with experience managing several IFISAs. All bond investors are assessed and verified for due diligence purposes before they can be accepted. Fluid ISA Bond 1 Limited will receive the investment money in tranches after a 14-day minimum cooling-off period. Interest to investors will be paid from Fluid ISA Bond 1 Limited to NPI. Bonds Backed By Legal Expertise Also working alongside Fluid on the bond raise is national law firm Clarke Willmott LLP, who introduced the idea of mini-bonds to Fluid and have acted on several bond raises in the past. Capital Growth Group Limited, who act on our behalf as distributors for the bond by utilising a variety of marketing platforms, assist with queries before investments are made. Both organisations have experience working with NPI on successful ISA bond raises previously. Fluid will utilise the money raised by way of the Bond, and lend it at a rate of 6% per annum to the lending arm of the group, Fluid Lending Limited

13 The Fluid Approach The Fluid Business Model From the beginning, the simple idea behind Fluid was to ultimately offer bridging loan facilities at a competitive rate in the unregulated market of business-to-business lending. 1. Money deposited with the ISA Manager in an IF ISA account. 2. Once the cooling-off period has passed, funds are drawn-down into the BondCo, the Bond Issuer. 3. Funds lent within the group from the BondCo to the LendCo, the bridging loan company. 4. Upon approval by the credit committee, terms will be agreed with the recipient company and funds will be lent out to borrowers. Funds will be lent internally from Fluid ISA Bond 1 Limited to the LendCo (Fluid Lending Limited), and the interest rate will be the same as that offered to the ISA bondholders (fixed at 6% per annum, paid quarterly). Fluid Lending will aim for a minimum lending interest rate of 0.9% per month to break even, hoping to achieve an average closer to 1.25%. All loans are asset-backed and will be short term, typically lasting from 6 to 18 months. Investor Northern Provident Investments Limited Fluid ISA Bond 1 Limited Fluid Lending Limited Borrower 8. Investors are free to withdraw earned interest from their IFISA account at any time. At the end of the bond period, their investment is returned. 7. Quarterly interest payments are made from the BondCo to the NPI client account, to be distributed to investors ISAs. 6. Interest is paid regularly by the LendCo to the BondCo to cover the quarterly interest owed to investors. 5. Interest is paid by the borrower to the lender monthly. Funds are paid back at the end of the loan term

14 Dear Investor On behalf of myself and everyone here at Fluid, I am delighted to give you the opportunity to invest in the bonds, and I look forward to your ongoing support. Now that you know more about the opportunity we offer, we d like to give you some more information about our company, the team, and the types of partners we work with here at Fluid. All the frequently answered questions are listed at the back of this brochure, but if you have any more queries, please don t hesitate to get in touch. Thank you, Ansar Mahmood Managing Director 26 27

15 We are Fluid The need for bridging providers is bound to increase further, and a highly professional, industryexperienced, quality-driven player is precisely what is needed in the current lending climate. Fluid are committed to ensuring an accessible, responsive, and dependable service maintaining strong communication links with all parties to ensure Fluid Lending assess applications quickly and effectively. By providing a unique return for investors in the shape of quarterly payments at a good rate of interest, we give you an opportunity to potentially generate a high return working with a trusted organisation in a competitive marketplace

16 Meet The Directors Ansar Mahmood A Chartered Accountant, Ansar has over fifteen years of experience working with a variety of entrepreneurial businesses to support their expansion and achieve their ambitions. His dedication and attention to detail is second to none. In the space of just five years, he founded Pomegranate Consulting and grew the startup from a two-man band into a multi-office business with hundreds of clients. Having closely followed the rapid boom of the Manchester property market, Ansar brings his valuable financial knowledge to many developments across the city. As well as his wide contact base, Ansar is also Vice President of TiE UK North, the global entrepreneurs network. Will Jackson Will is the Finance Manager for several property developments around the North West, and has previously worked in company sales and acquisitions for a business broker. He has contacts throughout the finance and property industries across the UK, along with a wealth of experience in working with professional services clients including surveyors and architects. As a fellow developer on the same Greater Manchester developments as Ansar, both have a good working relationship

17 Partner Showcase Pomegranate Consulting Accountants And Business Advisors Pomegranate Consulting are an award-winning chartered accountancy practice based in the heart of Manchester. Pomegranate believe in commitment and care. Commitment to being proactive problem-solvers, not just passive number-crunchers; and personal care for each and every client and their business. They have built a solid reputation as a non-traditional accountant that does things differently. Clarke Willmott Solicitors With offices across the UK, Clarke Willmott is a firm of solicitors that specialise in offering legal advice on all aspects of lending transactions for borrowers, banks, building societies and specialist lenders. Having acted for buyers, sellers and investors, their breadth of experience helps maximise the value of transactions whilst minimising associated risk. Pomegranate Commercial Finance Commercial Finance Brokers Also part of the Pomegranate Group, Pomegranate CF is a specialist commercial finance broker able to call on over 20 years experience in the fast-moving world of finance. As a close partner, Pomegranate CF can act as a conduit for sourcing bridging finance deals for the Fluid Trust lending arm. More Group Capital Services Independent Security Trustee More Group Capital Services acts as Security Trustee on a variety of transactions, both in the public sphere and on niche private deals involving alternative finance providers. We re well known for our proactive approach, efficient completion of waivers and approvals and full independence as a nonbank trustee. Harold Sharp Accountants And Auditors Since 1927, Harold Sharp have provided audit, accounting and taxation advice to businesses and their owners. In this time, they ve helped their clients make a successful transition from startup to growing enterprise. Harold Sharp have been appointed as our independent auditors

18 Frequently Asked Questions Who are Fluid? Fluid loan money as lending capital to a bridging loan company that provides bridging loans to businesses (including property developers) throughout the UK. What are the returns? The Fluid Bond yields an annual interest rate of 6%, with regular payments every quarter. What is the minimum investment amount? The minimum investment amount is 2,000. Does the bridging loan company aim to raise a certain amount of capital before commencing? No, Fluid s lending arm will utilise the investments as soon as the transfer is received. How do I receive income from my investment? Interest is paid into your ISA on a quarterly basis. You can access your funds through your online account and withdraw them when you like. Ways my capital is protected? Protective measures are in place to help safeguard investors capital. The lending company undertakes thorough due diligence on its borrowers and must meet a strict maximum 70% LTV criterion to provide peace of mind to investors. Fluid assets are held in trust to protect investors in case either the borrowers, lending company or Fluid fails to meet its commitments. Could the investment be affected by currency fluctuations? No. Your investment is in GBP with no exposure to other currencies and all interest is paid in GBP. Will I own company shares? No. Your IFISA is a corporate bond, ultimately secured against company assets. What happens if Fluid doesn t lend money to the lending company? If for any reason your money is not lent to the project developer within 90 days of us receiving it, we will return the money to your account. In the unlikely event of this happening, you will not receive any interest on your capital. Can I cancel my investment? You can cancel your investment account up to 14 days after you receive an saying your ISA application has been accepted. After this, you generally cannot get your investment back until the end of the term. To cancel within the first 14 days, please , call or write to the IFISA Plan Manager in accordance with the Fluid ISA Terms and Conditions. Can I make an early withdrawal of funds? Bonds are considered non-readily releasable investments. You should expect to hold them for the full three-year term, although you may be able to find an investor willing to purchase the bonds from you. In these circumstances, you should speak to Fluid to arrange the transfer to another party. You can also request early redemption of your investment, including payment of interest accrued until the requested redemption date. Early redemption is at the director s discretion and will incur an early redemption penalty of 6%. Who is my ISA Manager? Your ISA will be managed by Northern Provident Investments Limited, an ISA Manager Authorised and regulated with the Financial Conduct Authority. Are there any potential conflicts of interest? A full list of the directors interests is detailed in the Bond Prospectus. What happens to my bonds if I die? If you die whilst owning bonds, your investment can be transferred to an authorised person acting on behalf of the estate. If you are acting on behalf of the estate of a deceased investor who owns bonds, please contact us to explain your situation. How do I make a complaint? For any concerns you have with the company, please contact our customer services team so that we can investigate your complaint fully. Please contact our customers services team on and we can investigate your complaint fully

19 Risk Factors And Further Information Capital at Risk. Your Investment can go down as well as up and you may lose some or all of the funds invested At Fluid, we aim to increase safety and security for our investors by ensuring Fluid lending conduct thorough due diligence and independent assessments, but there are a variety of risk factors you should consider and know about. External Events Economic, social and political events or trends can influence the Fluid Bond, along with largescale global events that can affect the market (such as terrorist attacks and social unrest). Past Performance The economic climate is in constant flux, so the previous performance of bonds is not an absolute guarantee for future returns. Business Strategy Every step is taken to ensure that the project developer s business plan is likely to succeed, but the susceptibility of the market to sudden change means that no strategy is guaranteed to meet all of its objectives. Property Prices The values of sites can rise and fall depending on external factors, meaning bondholders may not receive the full amount they invested in the Fluid Bond. Overruns And Delays All project costs and timescales are calculated estimates, and there is a risk of lower returns if the developer is unable to follow through on their previously agreed conditions in terms of fees and deadlines. FSCS Protection Fluid bonds are not protected by the Financial Services Compensation Scheme (FSCS). Subsequently, neither the FSCS nor anyone else will pay investor compensation upon the failure of the Company. If the Company ceases trading or becomes insolvent, you may lose all or part of your investment in the bonds. Diversification Investing in the bonds allows you to potentially diversify your investment portfolio, and in order to mitigate risk, you should continue to spread your money and place it into other investment opportunities. Inflation Inflation rises can cause the value of your savings to fall if your bonds cannot keep pace. Non-Ready Realisable Investment It is important to regard the Fluid Bond as a long-term investment, and it may not always be possible to withdraw funds at an early stage or find a suitable purchaser for bonds. Asset-Backed Asset-backed does not guarantee all capital can be repaid

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