How Security Loans Help Smaller Businesses Address Cash-Flow Problems

The Department of Small Business Development published a report in 2017 that showed government departments were slow to pay invoices at the time. According to the report, invoices of more than R4.3 billion remained unpaid in September 2017. This is, however, a trend that continues. Small- and medium-sized businesses, delivering products and services to government departments cannot easily absorb such bad debts, leaving them no other choice than to close doors. Fortunately, security loans now make it possible for such companies to stay afloat until they receive payments, or at least generate other income from private clients.

However, it is not just government departments that are slow to pay invoices. Large firms often pay invoices of small to medium service providers 30 days later or sometimes months after. Many such firms simply do not pay the smaller service providers, with little regard for the impact their actions have on the operations capacity of these businesses.

With only a small percentage of start-ups succeeding and cash-flow management being essential for companies during their initial growth years, the above paints a bleak picture for entrepreneurs in South Africa. Add to such the reluctance of banks to lend money to smaller businesses, and it is understandable that alternatives must be sought. Fortunately, security loans as offered by our firm help these businesses to gain access to funds to stay open, expand, market, and pay salaries while waiting for bigger companies to pay.

How Our Solution Works

We provide loans against vehicles, such as cars, trucks, caravans, and motorcycles. Business owners can borrow between R5000 and R500 000 against their vehicles. Our security loans are set at a maximum of 50% of the asset value. This means that should the business owners be unable to pay back their loans that they can apply for an extension on the contracts, provided they have paid the interest in full by the due date. If they still cannot do so, the assets are sold at the best possible prices, and the surplus is paid back to the borrowers. There is no risk of building bad credit or having to sign surety. The vehicles are the security for the finance.

The client’s vehicle or vehicles are kept in safe and secure storage for the full period of the security loans. Once paid in full, the assets are returned in the same condition as upon entering the agreement. Such solutions are lifelines for many businesses during periods of having to wait for payments.

How to Apply for One of the Security Loans

We make it as easy as possible to quickly gain access to much-needed funds. Simply use our online facility and complete the application form. A consultant will call back and help you through the process. It is discreet, quick, and secure. Our consultants assess the value of the asset used as collateral to get to an amount that you can borrow. If you approve of the amount, we make a payment to your chosen account via EFT. We store your vehicle at our facility until the amount is paid in full. Once paid, you take possession of the asset.