Home workspace loans for hybrid working
Hybrid working is expected to become the new normal for many and while it offers great flexibility, it has left some people working in less-than-ideal circumstances.
However, with employers having a duty of care for their employees, now is the time to consider how they can help to create the best working conditions for those continuing to work from home.
Offering a ‘home workspace loan’
Some employers may wish to introduce an interest-free ‘home workspace loan’, which can be packaged as an employee benefit. This would provide financial support for staff looking to make their remote working conditions more comfortable.
The terms of the home workspace loan are at the business’ discretion, so it can be tailored to suit both employer and employee. Terms to consider include:
- Repayment options
If businesses choose to introduce this perk, it must be approached in a fair and inclusive way, to ensure all employees are given the chance to make as many changes as necessary.
Not a normal loan
It is important to remember that this type of loan is different from those offered by banks and other finance providers.
It is not a regulated credit agreement and doesn’t fall under the Financial Services and Markets Act 2000, meaning it isn’t regulated by the Financial Conduct Authority (FCA).
Offering the loan as an employee perk does mean that certain levels of bureaucracy can be avoided. However, to ensure that it is not deemed a regulated activity, there are strict rules to follow. If these are not adhered to, the loan scheme will require authorisation.
Understanding the differences
The first major difference between this loan scheme and a standard loan is the structure of the agreement. The home workspace loan requires the agreement to be between a borrower and lender alone, meaning the employer cannot get involved with any of the chosen contractors or suppliers.
Another aspect to consider is the interest rate. In most cases, it’s advisable that it is offered on an interest-free basis, which would make the terms more beneficial to the borrower than the lender, showing a focus on employee wellbeing.
Lastly, the agreement cannot be a ‘restricted use credit’. Employees should be free to use the money how they see fit within the purpose of the loan and the employer cannot interfere.
Keep your employees informed
When communicating the loan to the workforce, it is important to be transparent and not misleading. The terms and expectations must be laid out clearly, so workers understand the risks and costs involved with the agreement.
While the loan is an effective way of supporting staff working remotely, it may not be the right fit for every business. For smaller companies that might not have the financial capacity to offer a full loan to every employee, they may wish to provide smaller loans or purchase furniture outright.
Remote working has brought many positives, including creating a better work-life balance for employees, but it has left others struggling. By offering home workspace loans, employers can provide their teams with everything they need to do their best work.
Get in touch with our debt and asset recovery team to find out how they can help.
Find out more about our home workspace loan fixed fee
For a fixed fee, our team of consumer credit experts work with you to set up a home workspace loan benefit for your employees quickly and efficiently.
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