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How can you finance the purchase of a business, or get money together to buy a share/ownership in a business? 1. Through a Business loan. To obtain business loans through the existing Financial structures is not very easy, but it is possible. We assist our clients to obtain loans through either Business Partners or Khula. This is the way to go if you want to buy a complete business. You will need to go through all the necessary processes including the completion of application forms, writing business and marketing plans, proving your managerial and technical skills and know how and providing at least 20% of the necessary funds in the form of a Cash Deposit or offering some form of security. 2. Available cash. You presently have only so much in cash. You may also be able to make a personal loan from friends or relatives. 3. A Second bond against your property. This is the ideal way to raise finance. It is also the cheapest way to get your hands on the necessary funds. A property loan may cost you 14% interest per year while investing in a business with others (Consortium concept) will normally yield between 20-40% per annum. This means you are making money using your property as security. Example: A Bond of R1 Million calculated at prime will cost you around R10.000 per month. Investing this same amount into a business yielding the percentages indicated below, will yield you a much higher income. Your profit Calculator
The difference between the amount in the yellow, and the purple blocks will be your MONTHLY profit after the repayment of your monthly loan to the bank. This difference between the Income earned and the repayments to the bank on your second bond (the profits), can be used as income for personal expenses (salary) or invested into your Bond account to pay your total Bond off much quicker.
Important Notice: Pretoria Business Brokers nor any of it's Staff offer financial advice.
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Business Financing
