Cara Skikne: Lamna is a new kind of lender. It gives out short term loans to higher net worth individuals, using their so-called treasure assets like luxury cars, boats, artwork and antiques as collateral. Charles Mayerowitz, co-founder and director of Lamna joins me now in the studio. Welcome.
Charles Meyerowitz: Thank you, nice to see you.
Cara Skikne: Can you tell us about your clientele. Is it typically just entrepreneurs who are looking to plug cash flow problems?
Charles Meyerowitz: It is mainly exactly that. Mainly, entrepreneurs who need immediate access to funding and they just can’t get it from the judicial banks or they have had an irregular payment coming from a customer or growth in a business that they need quick access to funding. Those are the people that generally come to us, that have got lazy assets, that have got a value that they can’t tap into in terms of the judicial banking and we are able to attribute value to them and can give them access to funds, within 3 to 4 hours.
Cara Skikne: So this gap in the market is created by banks not being able to provide these kinds of loans. Why is that?
Charles Meyerowitz: Well, I think banks don’t recognize these lazy or surplus assets as collateral. They battle to ascribe value to them and that creates the gap for us. A lot of people have generated wealth and created value over the years, and now they battle to harness it in the right frame time, in a quick turnaround time that will give them access to cash when they need it.
Cara Skikne: What size loans are we talking about here?
Charles Meyerowitz: It doesn’t really matter on the size, it depends on the asset that you have that can back it up as collateral. Our history, we have given loans as small as R10 000 to R400 000/R500 000 , so it really depends on our customers need for cash and their accumulated assets or wealth that they have got which they can give us as collateral.
Cara Skikne: Have you received any strange objects as collateral?
Charles Meyerowitz: We have received some strange objects. Probably the strangest one that we have received is a hearse. This particular guy needed further capital for his undertaking business and he had a spare hearse that wasn’t being used, and so, he gained access via the hearse.
Cara Skikne: What are your interest rates like?
Charles Meyerowitz: We charge in terms of the National Credit Act , we are slightly more expensive than the banks but, we are able to give access to funds extremely quickly.
Cara Skikne: Have you followed any global models for this type of lending?
Charles Meyerowitz: There are companies that are doing this in the States, in the UK and in Australia and we see it as a growing form of finance and an acceptable form of finance that people may have been unaware of in the past or may have frowned upon it. So, definitely a growing way to get access to capital, particularly in the tough times that we have and that they are experiencing right now and with the contraction in the banks giving out and lending out money.
Cara Skikne: What is your rate of default like for these kinds of loans?
Charles Meyerowitz: So far, it is an extremely small rate of default. The entrepreneurs are extremely cash flow savvy. They know what is happening in their businesses. They just need that temporary little push to get them over the hill so that they can carry on their business in the normal course again. So fortunately, we have had a very low default rate.
Cara Skikne: What happens to the assets that you do get in as collateral?
Charles Meyerowitz: We store them securely at our premises, either in Cape Town, Port Elizabeth or Johannesburg until the period of the loan is up, in which case, they pay us back the capital and we give them back the assets and everyone is happy.
Cara Skikne: Have you ever had to sell on assets to auction houses or dealers?
Charles Meyerowitz: Unfortunately, we have had to sell on very rare occasion but we try work with our client through it because we understand the unpredictability of cash flow and only in the event that we really feel that there is no alternative course do we then go and recover our funds back by selling the assets.
Cara Skikne: And to which extent are these loans individualized, because people have assets that vary across the board and presumably things that they are quite attached to or, that have a lot of meaning for them.
Charles Meyerowitz: It is. People are very nervous to hand over their assets at the beginning but once they see the benefit – it is really for a purpose, it is for a short term purpose and once they see that benefit and have crossed over in their mind then they are very, very comfortable, particularly when they come to our offices and see the infrastructure and see how and where the assets are stored, they get a lot of comfort in knowing the process is going to go just OK.
Cara Skikne: And knowing that it is discreet, as well.
Charles Meyerowitz: Absolutely, knowing that it is discreet.
Cara Skikne: And you would have customers coming in for repeat business?
Charles Meyerowitz: We have a lot of repeat business. It is growing more and more. The referrals and people coming back because they know that it is quick, it is discreet, nobody knows about it and they can get access to their funds really quickly.
Cara Skikne: Well thank you so much. That is Charles Meyerowitz, co- founder and director of Lamna.
Cara Skikne for Business Day TV
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