Unlock Larger Funding using Property, Fixed Assets or your Debtor's Book as security!
As we near the end of our SME funding series, this week we focus on Secured Loans, a popular option for businesses that can leverage property or other valuable assets as collateral. Secured loans typically offer larger amounts and longer repayment terms because the lender has the comfort of an asset backing the loan. This makes them ideal for major expansions, equipment purchases, or working capital injections that require significant funding.
How It Works:
Identify an asset (property, machinery, or debtor's book) that can be used as collateral.
Apply for a secured loan using the asset’s value to back the loan.
The lender assesses the asset and approves the loan amount accordingly.
You receive the funds to grow your business.
Repay the loan over the agreed term, with the asset serving as security in case of default.
How it can benefit your business:
Lenders often offer more competitive rates when a loan is backed by collateral.
You can access more substantial funding based on the value of your property or asset.
More flexible, longer terms ease monthly repayments and improve cash flow management.
Successfully repaying a secured loan helps establish or improve your credit profile.
Real-World Example:
A Johannesburg-based property investment company, used secured loans to finance several commercial real estate developments across South Africa. By leveraging their property assets as collateral, they accessed large-scale funding at favourable rates, enabling substantial growth and portfolio diversification.
Key Insight: Secured loans can be a strategic way for SMEs to unlock significant capital by using assets they already own, helping fuel growth without immediate cash strain.
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