Entrepreneurs, small business owners and property investors may be facing a tough year-end holiday season following the Reserve Bank’s recent decision to hike interest rates.
The second increase in the repo rate to 6,25% brings the prime lending rate to 9,75% and will certainly have an impact on slowly diminishing profit margins.
This applies to small businesses who may be struggling to service debt commitments, and experience cash flow problems, which in turn can make it difficult to reimburse staff and suppliers for goods and services rendered.
For this reason Charles Meyerowitz, CEO of LAMNA Financial, an asset-based lending company, believes business owners are more likely than ever before to make use of asset-based lending over the festive period.
“LAMNA provides welcome relief for South Africa’s small and medium enterprises as well as individuals requiring immediate liquidity while tough economic conditions prevail,” says Meyerowitz.
“Our lending criteria are far less stringent than that of traditional banks. In addition our transaction processes are hassle free and applicants have almost immediate access to finance,” he adds. The initial value assessment is done online, which means clients can enquire about the company’s services in the comfort of their own homes.
“Once the application is approved, we get an industry expert to value the asset,” says Meyerowitz. Added advantages are that borrowers do not have to undergo credit checks or provide any income or employment verification. “Potential borrowers will quickly know if their application for an asset-based loan has been successful or not, eliminating unnecessary waiting periods,” says Meyerowitz. “The process is quick.”
Since its inception LAMNA has provided finance to more than 900 businesses and individuals in South Africa.
LAMNA’s financing team comprises of financial advisors, chartered accountants, lawyers and trained appraisers who can help applicants with tailor-made financial solutions.
“One of the real strengths of asset-based lending is that it can be combined with other sources of financing,” says Meyerowitz, “such as existing overdrafts and term loans.”
More than 90% of LAMNA’s clientele are entrepreneurs and Meyerowitz expects this number to increase in light of the tough economic and trade conditions.
LAMNA accepts a range of assets, such as valuable jewellery and watches, luxury vehicles, whiskey and wine collections, art and antiques and even yachts and boats to secure loans. “But we are flexible. Individuals may have other valuables that could serve as collateral for a loan,” says Meyerowitz.