Business owners in South Africa can unlock the equity in commercial property they own by using it to secure asset-based loans.

This type of loan could provide funds you need to see your business through a cash-flow crisis, or to leverage an opportunity to grow your business. It’s also available much more easily and much faster than a traditional business loan from a bank.

At Lamna, we’ve offered commercial property loans as high as R10 million. The loan amounts we offer will depend purely on the value of your commercial property.

Using commercial real estate to get a business loan

Using the net worth of a building, or a piece of commercial land, to secure a business loan reduces the risk exposure to the lender. It also supports a funding avenue that is not always available at banks and other conventional financing companies.

Reduced risk translates to lower interest rates than those usually levied on secured business loans and lines of credit.

As the lender has a stake in the commercial property, and can sell it to recoup any losses, the cash flow and profitability of the business is not of material interest to loan providers operating in the asset-based lending space.

This essentially means any registered company that owns unencumbered commercial real estate in South Africa automatically qualifies for a property collateral loan from a finance company specialising in asset-backed lending

What kind of property can you use as collateral for a loan?

Offices, buildings, warehouses, factories and commercial land, that do not have an existing bond from the bank, can be used as collateral for a business loan.

The property should be owned by a bona fide company, and not an individual. Personally-owned real estate is rarely accepted as security for a business loan.

What kind of financing can I get using property as collateral?

Banks and asset-based lenders offer cash term loans backed by paid-up commercial property.

Secured loans at banks have lengthy approval times due to the volume of documents that must be assessed prior to approval.

The bank usually requests the company’s credit record, as well as at least three years of income statements, balance sheets, tax returns and schedules of assets and liabilities.

Businesses with a poor credit history, or negative cash flow, are charged much higher interest rates by banks – that’s if they’re approved for a loan at all.

Asset-based lenders process loan applications comparatively quickly. The supporting documents required by the lender are kept to a bare minimum.

Provided the company has the means to repay the loan, the funds are available almost immediately.

How big a loan can I get against commercial property from Lamna?

At Lamna, business owners can secure loans against commercial property in excess of R8 million, depending on the appraised value of the real estate.

How can I get a loan for commercial property?

Simply contact us at Lamna with details of your commercial property. Once we’ve appraised the value of the property, we’ll make a competitive loan offer.

Documents we’ll ask you to provide to complete the loan process are the original title deed and ERF details of the property, your company registration papers and three months of bank statements.

At Lamna, we make it fast and easy to use commercial property as collateral for a loan. We also offer fast, discreet loans against the value of a wide range of other assets. Contact us on 086 111 2866 for more information about our commercial property-backed business loans or short-term personal loans.