At Lamna, we offer fast and convenient advances on property sales in South Africa to allow sellers to access the final proceeds of their sale while the transfer of the property is still underway.
In this article, we answer these questions:
- How can an advance on a property sale help the seller?
- Which sellers qualify for an advance on their property sale?
- How much can you get as a loan against a property sale?
- How long does a property transfer take in South Africa?
How advances on property sales can help sellers
Advances on property sales are also known as bridging finance. When a property sale is finalised but the transfer is still in progress, the seller doesn’t have access to the proceeds yet.
This means they can’t use the expected funds for time-sensitive payments, such as transfer fees, moving costs or rental deposits.
An advance or bridging finance is a type of loan that’s backed by a confirmed and expected payment that hasn’t been received.
In the case of property bridging finance, the loan is secured by the sale of the property – which is binding – and the lender is reimbursed when the transfer is complete and final proceeds are paid out.
Other advantages of bridging finance include:
- access to funds even if transfer is delayed
- repay the loan once registration is finalised
- fast access to funds – usually within 24 hours
- unaffected credit score
- transparent fees or charges.
Who qualifies for an advance on a property sale?
Anyone who has sold their property and is awaiting registration and transfer can apply for an advance on the expected final profit.
The final profit, which is the amount after all deductions including any outstanding bond, will be used to calculate the loan.
To apply for an advance, you must supply a signed offer to purchase, proof of purchase price, signed transfer documents and confirmation that you have paid the transfer costs.
When you apply for an advance, we will contact your attorney directly to confirm these details and ensure everything is in order.
How much can you get as a loan against a property sale?
You can get an advance of up to 80% of the expected profit before registration.
Once your application is processed and everything is approved, the funds are transferred into your account immediately. When registration is complete, your attorney will repay Lamna on your behalf.
How long it takes to transfer a property in South Africa
Generally, the process of transferring a property takes up to three months. However, unforeseen factors can cause delays that extend this time.
These potential delays make it particularly important to have a bridging finance solution if you have payment deadlines and moving dates to stick to.
At Lamna, we offer fast and discreet advances on property sales in South Africa.
We are a member of the Bridging Finance Association of South Africa (BFASA). For more information, contact us on 086 111 2866 or simply complete and submit our online application form.
ILLUSTRATIVE EXAMPLE
Client borrows R10,000 for 90 days.
Loan Amount | Repayment Period | Monthly Interest | Total Cost of Loan | Initiation Fee | Monthly Fee | APR |
|---|---|---|---|---|---|---|
R10 000 | 3 months | R500.00 | R2 914.50 | R1 207.50 | R569.00 | 60% |
Fixed rates range from 36% to 60% APR and payment terms range from a minimum of 3 months to a maximum of 24 months. Apart from the initiation and monthly fees shown in the table, the only additional fee is credit life insurance if the borrower does not have this already.
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