News

Bridging Finance - Spreading the love

November 6th, 2009

It has been a long and tough year for most of us in the property industry. Quince is however spreading some love and bringing relief to the industry by waiving our R300 initiation fee on the bridging of agent’s commission from now until 31 December 2009.

Yes that is correct!

From now until the end of 2009 the initiation fee on the bridging of commission for participating agents will be zero. You will therefore only pay our minimal interest rate of 2.95% per month (0.97% per day, R0.97 per R1,000 per day). No matter how you quote it, this is by far the most affordable bridging finance in South Africa.

What do you need to do in order to qualify for this? Well, just help us spread the love by referring the seller in the transaction to Quince.

How does it work?

  1. Download our special application form by clicking here or contact us and ask for the special agent application form.

  2. In the referral box at the top complete the name, contact number and/or email address of the seller in the transaction. (The name and the contact details need to be valid to qualify for the waiver of the initiation fee)

  3. Complete the rest of the application form and fax it to 0866 61 29 22.

As easy as that!

Other frequently asked questions:

Does the agency need to register with Quince and what is the responsibility of the principal?
No, agencies do not need to register with Quince. Our bridging contract makes provision for an agent to bridge his/her commission from Quince without the principal signing as co-borrower. Quince only requires a letter of permission from the principal. The principal therefore does not stand surety for the agent. Download our standard Principal letter of approval by clicking here.

Will Quince provide bridging to blacklisted agents?
Although not an automatic decline, Quince has to consider the credit history of a person before advancing credit. Please contact us before completing the application form if you are aware of judgements against your name and ask to speak to one of our consultants.

Why ask for personal financial information?
The NCA is an onerous law with few clear guidelines at present. Credit providers like Quince have to rely largely on their own interpretation of the Act to ensure compliance. Accordingly we require the information in order to properly evaluate a prospective client. Bridging companies that do not comply with the regulations of the NCA are contravening the Act and are at risk of being fined by the National Credit Regulator.

What if I do not want the attorney to see my personal financial information?
Clients are welcome to leave the field blank initially. Our consultants will phone the client before final approval and obtain the information telephonically.

At what stage in a transaction can Quince provide bridging finance?
Quince will be able to advance bridging finance as soon as all suspensive conditions in the sale agreement have been fulfilled and all documentation has been signed by both purchaser and seller.

What is the maximum amount of commission that Quince will bridge per transaction?
R100,000. Quince will advance up to 80% of the commission due to an agent.

How much will it cost?
It will cost you only R295 to bridge commission of R10,000 for 30 days. Click here to obtain a quote for a different amount and number of days.

What supporting documentation is required?
Quince only requires the Offer to Purchase and the principal’s permission letter for transactions under R50,000. Quince will contact the attorney to obtain any other supporting documentation if required.

Who signs the undertaking?
The conveyancer attending to the transfer. You are welcome to ask the conveyancer to sign the undertaking attached to the application form. Alternatively, just send us the completed application and we will contact the attorney to obtain a signed undertaking.

Does the seller need to apply for bridging finance in order for the agent to qualify for the waiver of the initiation fee?
No. The agent only needs to complete the referral block in the top right hand corner of the application form to qualify.

How do I complete the application form
1. In the “borrower” field complete the details of the agent that is entitled to the commission as per the Offer to Purchase.
2. In the case of an agency applying for bridging finance, the borrower will be the agency and the co-borrower will be the principal.
3. Please complete all the details as Quince will not be able to advance commission if the application form is incomplete.

Quince, the leaders in Bridging Finance.

Posted by Dewaal Basson

Credit Crisis Update

June 26th, 2009

Please download the presentation by clicking on the link below:

Credit Crisis Update.PDF

Are we at the top of the cycle and what does the future hold?

December 5th, 2008

Although times are tough in the property industry, it is important to realize that South Africans across all sectors are feeling the pinch. Inflation has been the key factor in determining the level of interest rates.

Keep reading →

Bridging is now easier than ever before

December 5th, 2008

Applying for bridging finance with the wrong bridging partner can be a hassle, to say the least. Now BFASA (Bridging Finance Association of South Africa), together with Korbitec, the provider of GhostConvey, is in the process of developing a bridging finance solution that will simplify and shorten this process dramatically.

Keep reading →

Light at the end of the property market tunnel?

October 16th, 2008

Although the property market has been feeling the pinch in the current economic climate, Johann le Roux, General Manager of Quince Property Finance, believes that while times are still tough, there might be light at the end of the property tunnel. Here’s why.

Keep reading →

National Women's Day Competition

July 4th, 2008

Dear Conveyancing Secretary/Attorney,

Quince is celebrating National Women’s Day and specifically the Conveyancing women of South Africa by giving away 5 Woolworths vouchers worth R1,000 each. All transactions received, approved and paid out between 1 and 31 July 2008 will automatically be entered into the draw. The more transactions you send, the better your chances of winning!

One lucky lady will also win a day of pampering at a health & beauty spa in her area!

And remember, every one of your clients is an automatic winner with our interest rate of R1 / R1,000 per day.

Please remember to insert your name in the contact person field on the application form in order to be eligible for a prize. The winners will be notified on 1 August 2008. Prizes will be delivered in time for National Women’s Day celebrations on 9 August 2008.

Kind Regards
De Waal Basson
Marketing Manager

Posted by Dewaal Basson

The Subprime Crisis

March 14th, 2008

Please download the roadshow presentation by clicking on the file below:

roadshow_presentation_-_the_subprime_crisis.pdf

Nasty mortgage surprise for bankers

January 31st, 2008

Realestateweb reporter
30 January 2008

Sharp drop off in demand for loans to fund property projects – commercial and residential stats.

The commercial property sector was expected to cope better with rising interest rates than the residential market - but latest mortgage figures show that growth slowdown is across the board.

FNB’s home loans division expects the slowdown to continue well into 2009.

Graphs show that it started back in 2006.

Growth in total mortgage advances outstanding slowed from just under 25% year-on-year in November to about 24% in December, “now well down from the 31% peak in October 2006”, said property strategist John Loos.

He expects the SA Reserve Bank’s Monetary Policy Committee to leave the prime rate at 14,5% when it meets on Thursday and thinks we could see the first rate cut later this year.

The residential market accounts for about 80% of total mortgage advances. Its mortgage advances slowed, said Loos, from about 33% in October, year on year, to just over 24% in November.

The “smaller commercial property mortgage market has held up better over the past year-and-a-half”, said Loos, though it has also taken a knock. It showed year-on-year growth of just over 30% in November - down from 42% in November 2006.

Demand for new loans is now “very weak”, said Loos.

New residential mortgage loans dropped by nearly 5% when “zooming in” on the third quarter of 2007 (figures are released a quarter behind), and commercial loans slipped about 1% into negative terrain.

New developments seem to be on a rapid decline, with vacant land mortgage figures down a staggering 32% year-on-year in December and loans for the construction of new buildings down too, at about -13% in value.

“The slump in vacant land and new construction mortgages is believed to be driven largely by the residential side of the property developments market, with new commercial development growth holding up significantly better.”

He said the commercial sector is driven by very low vacancy rates - particularly industrial and office.

Quality of mortgage loans is also deterioriating, with the number of people in arrears growing. As a percentage of total mortgages outstanding (residential and commercial), losses are still below 1% (arrears by over 12 months), while the figure for people who are in arrears by one to two months is now at around 3%.

“An extreme situation is not anticipated”, said Loos, though a further rise in losses is expected this year.

src: realestateweb.co.za

Job prospects expected to underpin home sales

January 21st, 2008

A positive employment outlook is always good news for the property market, and the SA job prospects for 2008 are excellent.

So says Dr Piet Botha, chairman of the Nationlink estate agency group, who notes that while increased employment does not necessarily signal a rise in property prices, it generally means an increase in the number of sales.

Referring to the most recent Manpower Employment Outlook Survey, he says it is notable that SA is among the countries with the strongest first quarter hiring prospects in 2008, with 27% of local employers expecting to increase their staff complement in this period.

And Jan Coetzee, MD of Manpower SA, has recently been quoted as saying these results indicate a positive trend that is expected to continue throughout the year.

The survey, which is conducted quarterly by the Manpower human resources group across 27 countries, shows that hiring expectations in SA are strongest in the mining sector, and also especially good in the electricity, water supply and manufacturing sectors.

Several other sectors, such as construction and finance/insurance/real estate/business services, are also continuing to benefit in hiring terms from infrastructure development and the build-up to the Soccer World Cup in 2010.

Regionally, the survey reveals that job prospects will be best in KwaZulu-Natal and Gauteng during the first quarter and in terms of demand, it shows that engineering and project management skills are at the top of the list.

Meanwhile, says Botha, it is encouraging that SA’s 70 biggest companies, the members of Business Leadership SA, have now committed themselves to making skills development a priority in their businesses and to building closer relationships with educational institutions to ensure an adequate “pipeline” of skills for the future.

“This will ensure that there are suitably qualified people to fill the new positions that are being created, and in time will also enable even more people to purchase their own homes.”

src: rodneyhater.com

Home Loan Talk – Bridging Finance

November 19th, 2007

by Denise Simpson

In today’s market, a substantial amount of home loan applications are applied for with costs. In other words, the bank is required to lend the selling price plus transfer fees, legal and bank costs.

To enable the transfer to go through quickly, the bank may release the legal fees to the conveyancing attorney prior to registration of the home loan. If the bank elects not to advance the legal and bank costs, this has to be funded by the purchaser. If he does not have this cash available, he has the option of applying for bridging finance. Bridging finance is a short term loan used to gain access to necessary funds, against future income.

In many circumstances, a home loan and transfer is dependent on the proceeds coming from the sale of an existing property. The transfer of the second property will only take place once the bond of the existing property has been cancelled. This could hold up transfer of the new purchase, and could cause a chain reaction of delays.

To avoid the above delays, there are bridging finance companies that will pay up to 80% of the proceeds expected from the sale of existing property prior to registration and transfer. The seller, who is in urgent need of cash, can have immediate access to the funds.

This may sound complex from a legal perspective, but it is a relatively straightforward procedure with which all conveyancing attorneys are familiar.

Bridging finance can also be obtained if a home is being renovated, and a further loan on an existing bond has to be registered. The delay in this sort of transaction can be up to 2 months, and by using bridging finance, you can save time and money.

Obviously, the bridging finance company will require remuneration for their services and the fee can be quite hefty, depending on the amount of the loan and the period for which it is granted. Because of its short term nature, bridging finance is usually granted for a period of between one and three months. Interest charges in the first month usually range between 3 and 5 percent of the total amount of the loan; however, this figure does tend to increase to a higher percentage if the finance is required for a longer period.

The cost of the bridging finance should be carefully weighed against the relief from the immediate financial situation and the time saved. Remember, the quicker the transfer, the less occupational interest paid by the buyer.

Should you wish to apply for bridging finance, and are concerned that you may be overcharged, it would be best to ensure that the company you use is a member of the Bridging Finance Association of South Africa (BFASA). Formed in 2007, the organisation states that their aim is to ensure the long-term sustainability of the bridging finance industry. This will be achieved by participating in Financial Industry discussions and forums, and creating an environment within which members can share valuable information, as well as promoting ethical and socially responsible conduct by their members.

For a list of current members, or to contact the BFASA, logon to www.bfasa.org.za.

src: privateproperty.com

Property Tip - Disposable income

August 13th, 2007

Since the implementation of the National Credit Act in June, “disposable income” has become part of the latest industry jargon. However, if you’re not au fait with how this is determined, you probably won’t be able to position your bond application in such a way that you qualify for the bond you require.

Property Finance Specialist, Tess Rodrigues of Property Factor, gives some insight into how your available disposable income is determined and what factors are taken into account.

She starts by warning that two of the major banks are only using the available disposable income to determine the size of bond you qualify for, while the other two are still using the repayment to income (RTI) of 30% in conjunction with the available disposable income.

As example:
· You require a bond of R1 million, your income is R28 000 and your available disposable income is R13 000 per month. The repayment on your bond will be R11715 at the current interest rate.

· At the two banks working with the RTI of 30% (i.e. R8 400) you will not qualify for a bond of R1 million, as the RTI needs to be in excess of R11 715.

· At the other two banks working with your available disposable income only, you will qualify for a bond.
Let’s look at another scenario:

· You require a bond of R1 million, your income is R36 000 (at 30% RTI = R10 800) and your available disposable income is now R8 000 per month. The bond repayment remains at R11 715.

· At the two banks working with the 30% RTI in conjunction with the available disposable income, you will not qualify for the bond, as your disposable income is not sufficient to service the bond.

· The same will apply to the banks working only with the available disposable income. Your application will be declined.

This means that the person with very little outstanding debt now qualifies for a considerably higher loan amount. At this point it is vital to be dealing with a good independent bond consultant who knows what is happening in the industry and is able to pitch your application to the correct financial institution.

How to Determine your Available Disposable Income
Net Income

List all your income earned from various sources. You must be able to prove all the income declared, be it in the form of salary slips, financial statements, contracts, cash remittance vouchers, deposits into your bank account etc. If you can’t prove it, you can’t use it. To determine your net income, deduct all your statutory deductions and employer reimbursements. For self-employed individuals, please don’t forget that you too are liable for PAYE or Provisional tax and this must be taken into account. Alternatively, the banks will deduct an arbitrary figure from your gross income.

Contractual Obligation
These are loans / facilities / credit cards agreements that you, in your personal capacity, have entered into. Through ITC, the banks are able to retrieve a payment profile report. This report shows all your existing credit agreements, their limits, the balances outstanding, instalments due and payments in arrears. The total monthly instalments must be added to your monthly expenses. If you personally don’t declare your contractual obligations, two things will happen: 1) your application will appear dubious and 2) the banks just add your total monthly instalments to your declared expenses, potentially reducing your available disposable income.

Furthermore, the minute you accept a “quote” (another new term used for the final approval of your facility), the creditor is obliged to list the facility on your payment profile report, with the exception of a homeloan, which will only happen on registration.

Expenses
These are all other expenses that are either paid for in cash, by debit order, cheque or any other means other than through an agreed facility. For example, if you purchase your groceries with a credit card, don’t list this amount under groceries as well, just mention that it is paid by credit card. The same goes for your clothing accounts and telephone and cellphone contracts etc.

Don’t forget that when you acquire a new property, you must also make provision for additional expenses such as rates and taxes, levies, water and lights, insurance etc. If you are currently sharing a home and will be moving out on your own to the new property, you will incur additional expenses such as groceries, telephone etc, which were previously shared.

Take into account that if you want to incur further debt, you are going to have to service it one way or another. Where is this money going to come from? Are you going to reduce your other investments? Are you going to cut down on entertainment? Will you eat less? Only list what you are obligated to pay, not the higher amount you are paying or wish to pay. Avoid listing luxury expenses that you intend reducing. Don’t round off your figures to the nearest 100, but rather to the nearest 10.

At the current interest rate of 13%, for every R11.72 added to your expenses, your home loan qualifying amount reduces by R1 000.

Also bear in mind that if you utilise all your available disposable income to service the instalments on your new bond, you will not have additional income to enter into other credit agreements. So before you decided on the size of your home loan you wish to apply for, make sure that you won’t have to enter into future credit agreements, for example having to purchase a new vehicle.

This is not just about the credit providers having to play private investigator, it is also the responsibility of the consumer to budget and manage his debt accordingly. Under the New National Credit Act, the consumer has been granted protection against reckless credit lending. However, if you fail to fully and truthfully disclose your available disposable income, you must be prepared to forfeit this privilege.

src: rodneyhayter.com

Bridging finance industry forms regulatory body

May 23rd, 2007

South Africa has seen phenomenal growth in the bridging finance industry, with myriad bridging companies having opened their doors for business over the past 18 months.

The growth of the industry has dictated that the presence of a regulatory body is imperative. As such, The Bridging Finance Association of South Africa (BFASA) was established earlier this year to address this need.

Officially founded on 15 January 2007 by some of the country’s largest bridging finance companies, BFASA is now operational with a code of conduct in place.

BFASA aims to introduce the concept of self regulation to the bridging finance industry, to ensure the long term sustainability of the industry and to create, among others, a culture of information sharing between its members.

According to Rieghard van Rensburg, chairman of BFASA, the short and long term sustainability of the industry will be achieved to a certain extent through BFASA’s participation in financial industry discussions and forums, as well as cooperation in respect of government initiatives. “We aim to be very involved in terms of financial legislation and regulation on a national level,” says van Rensburg.

The association will also actively promote ethical and socially responsible conduct within the industry. BFASA will further promote information sharing among its members in order to identify and avoid fraudulent activities such as double discounting etc. Through this information sharing, the association strives to ensure the continuing survival of the industry and its players.

BFASA is a Section 21 company that consists of a board of directors. It has a memorandum of association, statutes and working committees. All members join voluntarily and are obliged to pay an annual membership fee. “The members have to sign the memorandum of association, statutes and code of conduct,” notes van Rensburg.

The code of conduct covers issues such as conduct, rules for practice and ethical practice, accountability to the consumer, privacy, truth in advertising and professionalism, among others.

Van Rensburg says that as a whole, the industry needs to stand together to address common threats in order to create a sustainable long term environment.

BFASA has already signed on approximately 20 of the bigger players in the industry as members.

src: rodneyhayter.com

Reunert & PSG to start a new financing company

January 21st, 2007

By: Reunert & PSG

Electrical engineering and electronics group Reunert and financial services company PSG Group today announced that they will partner to form a new financing company that will commence business on 1 December 2006.

The new entity will be owned by Reunert (49.9%), PSG Group (39.9%), Michiel le Roux (6.7%) and other individuals (3.5%). Reunert is contributing RC&C Finance Company, better known as Nashua Finance, whilst PSG and the other shareholders are investing R376.5m in the new niche financing venture. The bridge financing company ZS Rational, in which PSG and Michiel le Roux has a majority stake, will also be acquired and will form part of the new entity. The new company will start with R500 million of capital.

RC&C has a financing book of R1.4 billion that consists mainly of providing asset backed finance to customers of companies within the Reunert group.

In addition to expanding the existing RC&C and ZS Rational businesses, the company will focus on other niche markets in the financing arena such as financing provided against clients’ existing share portfolios. These portfolios within the PSG group alone amount to more than R24 billion, and PSG will conduct its clients’ scrip financing through the new company.

Reunert’s Chief Executive Gerrit Pretorius says the deal provides an ideal opportunity for growth in the group. “We will continue to serve our Nashua customers, but can now also, with the right partners, provide finance to people outside the group.”

“In the short-term the deal will dilute Reunert’s earnings by about R12 million, but we expect this to change in due course, and a return on equity of more than 20% in the longer term is on the cards.”

According to Jannie Mouton, Executive Chairman of PSG Group, PSG is excited about the prospects of the new company and it will utilize part of the proceeds of its current rights issue to fund the investment, thereby strengthening the balance sheet of the new company.

Michiel le Roux (co-founder and former CEO of Capitec Bank) will serve as Chairman of the new company whilst Johan du Preez (former CEO of Innofin) has been appointed as CEO. “We believe that there is ample scope for a financing company that is able to accurately assess the underlying risks in these under serviced niche markets and that can provide a personalized and highly efficient service to its clients” says du Preez. “It certainly represents an exciting opportunity with huge growth potential.”

The Board of Directors will consist of Gerrit Pretorius (CEO, Reunert), Pat Gallagher (Executive Director, Reunert), Dave Rawlinson (Financial Director, Reunert), Jannie Mouton (Executive Chairman, PSG), Jaap du Toit (Executive Director, PSG), Chris Otto (Executive Director, PSG), Michiel le Roux (Chairman), and Johan du Preez (CEO).

Enquiries should be directed to Carina de Klerk at 083 631 5743

REUNERT

Reunert Limited manages some well known brands such as CBi-electric, Nashua, Nashua Mobile and is the exclusive distributor of Panasonic products in South Africa. It also holds a 40% interest in Siemens Telecommunications. Reunert has recently been included in the ALSI 40, the list of the top 40 shares on the JSE.

Reunert (JSE code RLO) has a market capitalization of R14 billion.

PSG

PSG Group is a financial services company which holds controlling and strategic stakes in a number of companies in the financial sector. It founded Capitec Bank Holdings Limited (specializing in the lower end of the market) with Michiel le Roux some 5 years ago.

Over the past ten years they have consistently and successfully identified strongly entrepreneurial businesses that have sound investment sense with no fanfare but rather solid business practice and good management. They initiate or acquire strategic and controlling stakes in these businesses, and assist them on a financial and strategic level to generate value for shareholders.

PSG (JSE code PSG) has a market capitalization of R3.6 billion.

MICHIEL LE ROUX

Michiel le Roux came up with the idea to convert three hundred cash loan stores to a bank for the unbanked, which led to the creation of Capitec Bank. He was the first CEO of Capitec Bank.

JOHAN DU PREEZ (41)

Johan du Preez has ample experience in medical risk management (both in South Africa and the USA where he worked for 5 years), insurance, and retail investments. He worked for the Sanlam group for 8 years and is well respected for his inspirational leadership skills. During this period he was first involved in the turnaround of Sanlam Health (CEO from 1999 to 2001), whereafter he lead Innofin (CEO 2002 to 2004) to a position of superior performance and industry leadership. Innofin operates in the affluent market segment of the retail investment market and was launched in 2001 as a joint venture between Sanlam and Macquarie Bank of Australia. Johan also served on the Executive Committee of Sanlam Life.

(src: Reunert)

Reunert, PSG in financing venture

October 3rd, 2006

By Tonny Mafu

Johannesburg - Reunert, an electronics and electrical engineering group, and PSG Group, a financial services company, had formed a niche financing venture that would specialise in issuing asset-backed loans to the companies’ clients, they said yesterday.

The new company, which is yet to be named, is expected to start operating in December with a capital injection of R500 million. It will be merged with ZS Rational, a bridging finance company in which PSG has a majority stake.

The companies said PSG and Reunert would hold 39.9 percent and 49.9 percent, respectively. Michiel le Roux, the co-founder of Capitec Bank, would have 6.7 percent.

PSG and other shareholders would provide R376.5 million in capital and Reunert would contribute RC&C Finance, which is also known as Nashua Finance. RC&C has a financing book of R1.3 billion, which consists mainly of asset-backed finance to clients of companies within the Reunert group.

Johan du Preez, the chief executive of the joint venture, said the new company would, among other things, finance office furniture for Nashua Finance customers.

Jan Mouton, the chairman of PSG, said the venture was expected to earn at least R60 million in after-tax profit after the first year of operation. There were plans to list it to incentivise management.

(src: Business Day)