COMMERCIAL FINANCE
the condition of surrounding buildings and whether any new developments are planned in the area . Entrepreneurs also need to ascertain whether the property complies with municipal regulations . This will influence the ability to raise finance as well as getting the property properly insured .
“ Although SME owners may intuitively think of banks as their primary option for funding , we encourage established entrepreneurs to consider alternatives .”
After the research and preparation process has been completed , SME owners are advised to review their options in terms of the interest rates and repayment options made available by banks , lenders and independent financiers .
The major factors that entrepreneurs will need to consider at this stage will be lending rates , term , the size of the bond and any related fees . In terms of fees such as administration , payments to attorneys for legal services and VAT , SME owners need to inquire as to whether these costs will be incorporated into the loan amount or whether they will become payable separately .
The distinction between commercial and residential properties will have bearing on the loan term , given that business property is regarded as an income-generating asset . Generally , therefore , banks will expect loans to be paid off faster than residential bonds .
120 NOV 2022 SA Real Estate Investor Magazine