It is quite a good idea to 'stagger' the closing dates so they don't all fall at once - this will also allow you to offer different terms to different lenders. Many schemes state how repayments can be made before the closing date if the investor requests it, and suggest appropriate 'periods of notice' for various sums. However, you should always state that such early repayments may be suspended if the co-op feels it has insufficient funds. You can offer interest, and you may think is prudent to pay interest in the form of additional loanstock, to avoid high running costs. Some co-ops have linked interest to inflation or base rates, but this is administratively very complex.
Lenders are liable to pay tax on their interest.
It is most important that you keep scrupulous records and ensure that clearly stated conditions are on all application forms and certificates. If the scheme is operating on a large scale you may even want to consider the type of insurance against losing money that all credit unions have. The purchase of loanstock can look like 'deposit taking', which under the Banking Act is only meant to be done by properly established banks. In order to avoid falling foul of this legislation, you need to ensure that you do not make 'repeated issues of loanstock with similar conditions'. For this reason, we would advise using loanstock only to start up your enterprise, and not as a long term source of finance.