Should your business have a cash flow or working capital requirement, and you don’t have sufficient value in existing invoices, we will look to structure a trade finance facility against residential or commercial property where equity exists. This Trade Finance loan facility can be structured in two ways.
- Where we have Debtor Finance against variety of securities
- Finance against property without the Debtors Book
Property Backed Finance is a type of funding used for a number of business activities:
The importing and exporting of goods, raising finance for capital equipment and raising finance to increase stock holding either from local or international suppliers.
We will assess the equity on your property and lend you a certain value. The amount borrowed can then be repaid in equal instalments over a fixed period of time.
Revolving Credit Facility
We will assess the equity on your property and give you an overdraft facility whereby you will service the interest portion of monies borrowed on a monthly basis.
Once you’ve received the loan, you could use it to fund a variety of things such as vehicles for your fleet, stock for your inventory, or machinery…the list is endless.
What is the difference between Invoice Discounting and Property Back Finance ?
Invoice Discounting is receiving regular cash advances on the outstanding invoices that your customers owe to you. The security is the outstanding debtors book (the receivables).
Property Backed Finance is a lump sum borrowed and paid back to Transaction Capital over a period of time, 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. The security for Property Backed Finance would be a first or second bond held on a residential, commercial or industrial property of yours.
- A minimum loan value or revolving facility of R500,000.
- The business must have at least one years audited financials .
- Cash Flow Forecasts for the next 12 months to show that the business can afford the loan / revolving facility.
- The ownership of a residential or commercial property.
How does it work ?
- Once Transaction Capital approves the facility bond needs to be registered.
- Transaction Capital will then make the full loan value available to you.
- If your funding requirement has been approved for a revolving facility, you can choose how much you want to borrow, and can pay it back whenever you want up to a 5 year period. You only need to service the interest on a monthly basis.
- You can also pay back the value you draw down at any stage and take more money when I need to, just like an increased overdraft.
As most business owners know, access to finance is an arduous process which is time consuming and with a low chance of success. It is even more frustrating when funds are due imminently but financiers are reluctant to advance money without a detailed application process and security.
One solution BridgeProp are able to offer PROPERTY SELLERS is instant access to the net proceeds due on registration.
Being able to access funding within 24 hours can be an invaluable tool, particularly at month end when timing is critical viz a vis:
- Vat Payments
- Creditor obligations