Pension Loans
Retirement, Dismissal, Resignation, Death or Divorce are traumatic events in a working persons life, but on the positive side, the lucky ones who have had a company pension or provident savings scheme, are able to make their policy paid up and they can draw down a portion of their funds.
That is the good news. The bad news is that it can take months to get the pension funds from the pension administrators. The reasons for these delays are varied and very frustrating for the individual. In most cases
large corporate companies with call-centres that have very little incentive to process claims fast. This leaves the ex-employee, perhaps only drawing minimum benefit from UIF and now unable to meet their financial obligations.
The Solution
Private pension lenders have recognized this problem and are able to advance pension cash to persons that have given notice to their pension fund, that they require their money to be paid out.
These Pension Bridging companies give pension loans from as little as R3000 up to R50 000 and even more in some circumstances. These funds are made available within 48 Hours of all the paperwork being completed. Yes, you hear right – 48 hours to get your pension payout!
Repayment
Once the provident or pension fund pays out the investment funds, the provident loan or pension loan plus interest and fees is paid back to the lender and the balance is paid to the fund member.
Cost
Provident Bridging loans and Pension Bridging loans, landing rates are governed by the NCA (National Credit Act). Private lending companies are obliged to comply with the NCA or risk having their licences withdrawn. Rates charged for these provident loans are fair considering the risk the lender takes.
Security
Pension bridging does not require any type of security. It is essentially an unsecured personal loan.
Risk
There is no risk to the borrower. There is a cost because the pension lender or provident lender charges interest and an administration fee. The borrower does not have worry about their pension money being stolen. The reason that the risk is low, is that the pension and provident money is paid directly into the members bank account, not to the lender.
Credit Bureau Listing
People often ask if they can get a pension loan if they have a poor credit profile. The good news is,
yes they can. This financial solution is designed to assist those in financial difficulty.
Provident Fund Loans and Pension Loans are a useful way for people that have funds saved to access some of their savings to assist them during difficult financial times.
Business Loans
Is your business taking strain under our extended lockdown? Bills mounting up, COVID 19 UIF not paying out, creditors calling for their money and clients not paying? Does that sound familiar? Rest assured, there is help at hand. A new business funding mechanism is available to businesses that have been operating for longer than 12 months and have a good credit record. These are called Unsecured Business Loans.
Requirements for An Unsecured Business Loan
- All that you need to provide is 6 months bank statements for the initial assessment. No need for audited financial statements, debts and creditors profiles, assets registers and other complicated documents. You’ve got enough on your plate already, we try to make the loan application process one less thing to stress about.
- Private Lenders
These Business Funds are offer by private lenders. These companies are easy to deal with and
respond quick because they are keen to lend money to business. The reason for this is that they
make money when they lend money. While the money is in their bank accounts it is not making
them money, therefore they are eager to assist you with your business loan requirements.
- Loan Sizes
The minimum loan amount is R50 000 and the maximum R1,5 Million. The amount a company
is legible for is dependent on the company turnover and how regularly the income comes into
the business.
- Timeframe
Due to the simple and streamlined process the loan approval can be within 3 days, but approval time is always subject to the applicant providing the information the lender needs timorously.
- Repayment
Repayment of business finance loans like these are made over a 6 month term. The repayment
is calculated by adding the loan plus interest together and then divided by 26 weeks. Repayment is by weekly debit order for a period of 26 weeks.
- Refinance
If a borrower has repaid the unsecured business loan on time for 13 weeks, then they are entitled to apply for a further business cash advance. The lender will reassess the business and make a decision on whether to advance further business funding.
Typical Applicant Profile
The lenders want to advance cash to businesses that have strong and regular cash flow. Businesses with daily or weekly cash in-flows are good candidates for a business loan approval. Typical strong, regular cash flow businesses are Filling Stations, Supermarkets, Butcheries and Hairdressers.
No Security Necessary!
A big advantage of unsecured business loans is that the borrower does not have to provide any security. Banks and other secured lenders want property, debtors and even plant and equipment as security for their loans. But in our harsh economic circumstances this model is not always possible which is where unsecured business loans come in to assist you to improve cash flow in your business right away.
Default on Loan
As with any type of lending, if the borrower defaults on the repayment, the lender is entitled to take legal action to recover their money. This can lead to the company and its members being listed at the credit bureaus and this has a negative effect on any business. It is best to not borrow money, if there is a likelihood of not being able to pay the loan back.
Unsecured business loans are suitable for businesses that have positive and regular cash flow. They are not the cheapest form of business loan but they are quick (1 days to approval), no security is needed and they suit businesses that are in need of a Short Term Bridging loan.
Personal Finance
When we rang in the New Year, who would have guessed we would face a global pandemic that would creep into every country and continent across the world. That some of us would lose businesses, lose our jobs or take massive salary cuts. We are living in extraordinarily difficult times.
The business gurus and commentators say there is a new ‘normal’ we all need to get used to which includes working from home, working in shifts or teams and often as a result, reduced hours. Unfortunately, this new way of doing business has resulted in company retrenchments, dismissals and forced resignations across almost every industry, with some being harder hit than others. As of today, hair & beauty salons, restaurants, certain manufacturing concerns and gyms to name a few can only operate under reduced capacity and with major restrictions in place. Many businesses have been unable to bring in an income since lockdown in South Africa started on 26 March 2020.
When faced with this situation, UIF registered employees can claim from the Unemployment Insurance Fund. The problem with UIF is that it does not pay out the full wage or salary. This leaves an income shortfall. Families expenses are generally fixed and there is very little opportunity to reduce monthly living costs. For example: school fees, rent, bond repayments and food are all fixed costs.
The good news is that there are a number of temporary financial solutions available to the public:
1. Pension Loan
If you have given notice to your pension fund or provident fund that you want to make your policy paid up, it is possible to secure a short- term Pension Bridging Loan from accredited private lenders.
2. Property Secured Loan
If your home is bond-free or has a bond that is less than 40% of the property value, it is possible
to secure a Loan Against the Property in some circumstances, to help you free up cash to cover expenses.
3. Loan Against a Movable Asset
It is possible to use your valuables like gold, diamonds, art, antiques, jet skis, cars, bakkies, motorbikes and other loose assets, as security for a loan.
When faced with the daunting prospect of retrenchment, do not panic. There are temporary financial solutions that enable families to make it through the tough times. For more ideas and financing solutions click here: www.nhfinance.co.za
