Property Backed Loans
Unlock working capital through your property.
A property backed loan is a fast, convenient way to access business funding at lower interest rates than traditional lines of credit. This solution provides a secured business loan using your residential, commercial, or prime industrial property as a guarantee.
Property backed loans can be structured in two ways to suit working capital or cash flow needs.
A lump sum payment, repaid in equal instalments over a fixed period, generally up to five years.
Revolving credit facility:
Access to cash as needed similar to an overdraft, servicing the interest portion of the loan monthly.
Benefits of a Property Backed Loan
Using immovable property to fund your business has multiple advantages:
- Faster approval, the minimum requirements for approval are straight-forward and less than that of a bank loan or overdraft application.
- Larger amounts available as the loan value is based on the value of the property and not what the lender is willing to grant.
- Flexible repayment terms, you can choose a fixed period and pay back the loan in monthly instalments or, in the case of revolving credit, service the interest monthly and pay back the value you have drawn at any stage within 5 years.
Getting Started With Property Backed Finance
- A minimum loan value or revolving facility of R500 000.
- The business must have at least one year’s audited financials.
- Cash flow forecasts for the next 12 months to show that the business can afford the loan or revolving facility.
- The ownership of a residential, commercial or prime industrial property.
Once Transaction Capital approves the facility:
- A bond is registered on the property.
- Depending on your chosen option, Transaction Capital will then make the full loan available as a lump sum or by the revolving credit facility.
- You service the loan as per the terms of our agreement.
- Lump sum loans are repaid in equal instalments over a set period. This is usually up to five years.
- On the revolving credit facility, you have the option to select how much you want to borrow and pay it back whenever you want within five years, only servicing the interest monthly. You can also pay back the value you draw down at any stage and take more money as needed, just like an increased overdraft.
More about Property Backed Finance
Property backed finance is the ideal solution for growing small to medium-sized enterprises that:
- Need an affordable and reliable alternative to traditional lines funding. This may be because you want to avoid excessive interest, need a fast cash injection (and cannot afford the tedious process of waiting for bank approvals), or you have exhausted other lending options.
- Need a large loan to purchase or repair capital equipment. You may not be able to get the full amount you need from an unsecured loan. This method of trade finance is that the value of the loan is based on the value of the property and not your credit score.
- Have funds tied up in unpaid invoices. You may offer your clients credit or have unexpected project/production delays which, in turn, delay payments.
- Want to take advantage of early-bird or bulk discount offers.
- Need to prepare for increased demand due to seasonal fluctuations.
Our solution is best suited for businesses that operate in industries such as:
- Importing and exporting
- Engineering and construction
- Transport and logistics
- Wholesale and Retail
- Printing and packaging
Property Backed Finance is a lump sum borrowed and paid back to Transaction Capital over a fixed period, generally up to 5 years. The second option in Property Backed Finance is to have a facility in place for those times of the year where you need access to extra cash, for example when there is a low turnover period with high operational overheads or a high turnover period when you need to carry more stock.
Property backed finance allows you to use your assets to fund your business growth. This is a viable alternative when traditional lines of credit are not an option.
It allows you to access the liquid capital you need to fund business expansion through a secured loan. The security for Property Backed Finance would be a first bond held on a residential, commercial or prime industrial property of yours.
Transaction Capital Business Solutions, previously Rand Trust, is an established company with over 60 years’ experience in providing funding to a variety of businesses throughout South Africa.
As a division of the listed entity Transaction Capital Ltd, we have an excellent standard within areas of high-risk management, compliance, governance, transparency and ethics.
We have earned a solid reputation for working with our clients to meet their specific and unique needs.
“The Transaction Capital Business Solutions team make you feel like you are part of a family. It is a breath of fresh air to deal with a team who are dedicated to the business needs and are willing to help a business achieve their goals. I am honoured to be a part of this amazing business.”
– Tanya Fainstein, Managing Director, Ultimate Resources.
Looking for a simpler way to manage monthly cash-flow? For additional peace of mind, you may want to consider…
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