Amounts: R250K +
Speed of Funding: Medium
Terms: 6 months - 5 years
Repayments: Monthly or end of term depending on lender. If end of term an exit strategy is required
Interest Rates: Lower than unsecured
What is a Property Backed Loan?
A property backed loan is type of secured loan where the property is used as security. This is ideal for a business with a temporary cash-flow shortage. It allows you to free up the equity locked up in un-bonded property to secure fast and flexible credit.
The loan facility can be structured in a few ways depending on the lenders product offering. Some examples include:
1. As a term loan, where the borrowed amount is then repaid in equal instalments over a fixed period of time
2. As a revolving loan facility where an overdraft facility is provided and you service the interest portion of monies borrowed on a monthly basis
3. No monthly repayments required because interest and capital is repaid together at the end of the term. This structure is very attractive if you are working on a deal which only receives payment on conclusion.
- Improved liquidity
- Higher levels of flexibility
- Stepping stone to other products through building a trust relationship with your provider
- Lower costs and interest rates than unsecured loans
- The property must be worth at least R 625 000 (dependant on lender)
Minimum advance of R 250 000 (no maximum)