Financing help

[undesign]

If your CC's turnover/profit exceeds the needs required by the bank as surity then you have no problems. They should not check your or any of your partners credit records. They might if your company does not meet their requirements to cover the loan.

But I won't stress about it if your CC has been running at least 2 years and turns a nice profit

They will still ask for surety. Unless you've already signed unlimited surety (if it is the original CC). Although you typically have to submit the latest CK1 or they will do a CIPRO search - so they will pick up the new member.

 

[Pitbull]

Thanks a lot Pitbull. If the turnover/profit to qualify for finance are checked then the total amount of the vehicle would be covered easily by previous years turnover.

I am just very glad to know that I am not affected due to this. As I was concerned that they might come to the company and collect items to make up for his own debt.

You all have been very helpful.

They can't collect anything from the business he has a share in It's like taking someone's son for the father owing the bank money

They can't hold the CC (seperate entity) liable for his personal debt issues. Unless he signed off his 20% share as assurity to that debt he is liable for. Which has legally can't do. If that is the case, they are only entitles to his 20% share of what ever it is that he is making from the business and not the full entity.

 

[Pitbull]

They will still ask for surety. Unless you've already signed unlimited surety (if it is the original CC). Although you typically have to submit the latest CK1 or they will do a CIPRO search - so they will pick up the new member.

True, but still irrelevant.

The business has been in good standings for a couple of years and would have built up it's own credit rating. So unless they are trying to buy something worth more than the cc there is no need for other assurity, no matter who/how many/or the credit rating or said owners.

 

[undesign]

They can't hold the CC (seperate entity) liable for his personal debt issues. Unless he signed off his 20% share as assurity to that debt he is liable for. Which has legally can't do. If that is the case, they are only entitles to his 20% share of what ever it is that he is making from the business and not the full entity.

Where to start? Even if he does cede 20% of the membership for his own personal debt the bank can only take the 20% membership. It has nothing to do with the assets of the CC, the bank will just be the holder of 20%. And in any event, the legal bank entity can't hold shares in a CC. They will try to sell it. But only the 20% membership itself. Still has nothing to do with the assets of the CC. It is two separate issues.

True, but still irrelevant.

The business has been in good standings for a couple of years and would have built up it's own credit rating. So unless they are trying to buy something worth more than the cc there is no need for other assurity, no matter who/how many/or the credit rating or said owners.

There may be no need for surety in your mind, and you can justify if any which way you like, but the bank will still request it.

 

[Pitbull]

Where to start? Even if he does cede 20% of the membership for his own personal debt the bank can only take the 20% membership. It has nothing to do with the assets of the CC, the bank will just be the holder of 20%. And in any event, the legal bank entity can't hold shares in a CC. They will try to sell it. But only the 20% membership itself. Still has nothing to do with the assets of the CC. It is two separate issues.

I think that is what I said

I mean his 20% stake in the profit/debt (Should have been more clear I assume)

There may be no need for surety in your mind, and you can justify if any which way you like, but the bank will still request it.

Strange, I have bought things on a CC name with no credit checks on my personal name what so ever.

 

[DJ...]

I think that is what I said

Nope, it's pretty much the opposite...

Strange, I have bought things on a CC name with no credit checks on my personal name what so ever.

You're right, that is very strange. BTW, how do you know that no credit verification process took place?

 

[undesign]

I think that is what I said

I mean his 20% stake in the profit/debt (Should have been more clear I assume)

Apologies if I misinterpreted. It is really moot, because even with the 20% they have no right of the CC's assets. The membership itself has value - to a potential buyer. There is also no right to the profits - the remaining 80% members can just make sure that no members' remuneration or "dividends" are declared.

Strange, I have bought things on a CC name with no credit checks on my personal name what so ever.

I have no idea what you mean? What does it have to do with finance? Banking works differently from Waltons you know.

 

[Pitbull]

Nope, it's pretty much the opposite...



You're right, that is very strange. BTW, how do you know that no credit verification process took place?

I work for a company where I can see all ITC checks agains my name and anyone else Forgot that?

Seems like I need to type out each and every word for a lack of confusion. So let me clarify this for you, when an ITC check is done against your name it's recorded on the ITC global system. A system which is highly used in the line of business I'm in now. Hope that prevents all confusion if not pls let me know so I can type more words for you .....

 

[DJ...]

I work for a company where I can see all ITC checks agains my name and anyone else Forgot that?

Seems like I need to type out each and every word for a lack of confusion. So let me clarify this for you, when an ITC check is done against your name it's recorded on the ITC global system. A system which is highly used in the line of business I'm in now. Hope that prevents all confusion if not pls let me know so I can type more words for you .....

So what you're saying is that you've obtained financing as a CC without any credit verification process, without submitting management accounts and without signing any form of surety? Name and shame that bank, Pitbull...

 

[Pitbull]

Apologies if I misinterpreted. It is really moot, because even with the 20% they have no right of the CC's assets. The membership itself has value - to a potential buyer. There is also no right to the profits - the remaining 80% members can just make sure that no members' remuneration or "dividends" are declared.



I have no idea what you mean? What does it have to do with finance? Banking works differently from Waltons you know.

Hehe, yea well tricks are plenty in business books


Those things I bought included a piece of vacant land of which I needed. Banks didn't want to approve it on my name for some obscure reason without me needing to fork out 20% cash. I bought it with a 100% loan against the CC. No check against my personal name on that loan from the bank in question.

 

[Pitbull]

So what you're saying is that you've obtained financing as a CC without any credit verification process, without submitting management accounts and without signing any form of surety? Name and shame that bank, Pitbull...

All of the above was done, the CC stands as surity signed for by the 2 owners. Business finances and books where verified and checked. Pls explain to me how you put the CC running and making a purchase to be checked agains the owner/s credit history?

I'm sorry I have not experienced it, but I also haven't gone out to make a R 200 000 loan....

 

[milomak]

A credit check may be run against the members when a KYC is being done if you are a new client of that bank.

otherwise, if the CC has a track record and the bank's are happy with the acuracy of the accounts, what need do they have to check the member's credit history? if they are happy with the cc as a business why would they need surety?

 

[undesign]

Hehe, yea will tricks are plenty in business books


Those things I bought included a piece of vacant land of which I needed. Banks didn't want to approve it on my name for some obscure reason without me needing to fork out 20% cash. I bought it with a 100% loan against the CC. No check against my personal name on that loan from the bank in question.

I believe you, but it is highly (did I highlight that enough?) irregular. I used to work for a business bank and we always asked surety (it is a principle issue, not just financial - the jockey needs to put his balls on the line, because ultimately the success and ability to repay rests with the individual's performance)

Either you were buying for 50% of the value and they were extremely comfortable with the LTV or it was Saambou, The Business Bank, Regal Treasury Bank...banks that are all in bank heaven (or hell depending on your point of view).

 

[DJ...]

All of the above was done

Ah, that was my point all along...

the CC stands as surity signed for by the 2 owners

OK hang on. What!?

Pls explain to me how you put the CC running and making a purchase to be checked agains the owner/s credit history?

I spotted the question mark so I assume it's a question. Can you phrase it as such please?

A credit check may be run against the members when a KYC is being done if you are a new client of that bank.

otherwise, if the CC has a track record and the bank's are happy with the acuracy of the accounts, what need do they have to check the member's credit history? if they are happy with the cc as a business why would they need surety?

My opposition needs to be taken into context. The OP (with clearly no noteworthy credit-record with the bank and a blacklisted member of the CC) asked for advice. Pitbull said don't worry, it'll all be fine if your profit/turnover is good. Well that's just not really the best advice the OP could have taken...

 

[milomak]

My opposition needs to be taken into context. The OP (with clearly no noteworthy credit-record with the bank and a blacklisted member of the CC) asked for advice. Pitbull said don't worry, it'll all be fine if your profit/turnover is good. Well that's just not really the best advice the OP could have taken...

i take your point

 

[Pitbull]

Ah, that was my point all along...



OK hang on. What!?



I spotted the question mark so I assume it's a question. Can you phrase it as such please?



My opposition needs to be taken into context. The OP (with clearly no noteworthy credit-record with the bank and a blacklisted member of the CC) asked for advice. Pitbull said don't worry, it'll all be fine if your profit/turnover is good. Well that's just not really the best advice the OP could have taken...

Ok let's make a bet?

I say the OP should apply for the finance on the CC name for said vehicle. Since we all know for a fact 1 member is blacklisted what do you think the outcome will be?

I bet the CC will get the finance for the vehicle if:

1. CC has been running for at least 2 years
2. CC is making enough profit to be able to afford said vehicle.

Want to take that bet?

 

[DJ...]

I bet the CC will get the finance for the vehicle if:

1. CC has been running for at least 2 years
2. CC is making enough profit to be able to afford said vehicle.

Want to take that bet?

The financing might just be approved, yes, but those will not be the only two criteria. And yes, I'm willing to take that bet.

The problem is once accounts are submitted to the bank, how do you know what exactly they are checking? Operational profit, gross profit, net profit, EBITDA, cash flow etc.

And the 'operating for 2 years' bit means buggerall if you have no existing facilities with the bank...

 

[Pitbull]

The financing might just be approved, yes, but those will not be the only two criteria. And yes, I'm willing to take that bet.

The problem is once accounts are submitted to the bank, how do you know what exactly they are checking? Operational profit, gross profit, net profit, EBITDA, cash flow etc.

And the 'operating for 2 years' bit means buggerall if you have no existing facilities with the bank...

Huh?

You came to the conclusion that said CC will not get the finance as 1 member of the CC is blacklisted.

I'm saying the CC will get it, even if all 3 are blacklisted. Based on the fact that the CC has a clear credit record and can afford the purchase. Irrespective of the listings of said CC members.

So let the OP do the finance and then we'll see

 

[undesign]

Ok let's make a bet?

I say the OP should apply for the finance on the CC name for said vehicle. Since we all know for a fact 1 member is blacklisted what do you think the outcome will be?

I bet the CC will get the finance for the vehicle if:

1. CC has been running for at least 2 years
2. CC is making enough profit to be able to afford said vehicle.

Want to take that bet?

I bet you they will ask for surety of all three members if the finance is approved.

OP, please report back on the outcome!

 

[DJ...]

Huh?

You came to the conclusion that said CC will not get the finance as 1 member of the CC is blacklisted.

Your comprehension skills remain as dormant as ever. Nowhere in that quote did I mention the blacklisting.

I'm saying the CC will get it, even if all 3 are blacklisted.

I'm saying you don't know what you're talking about then...

So let the OP do the finance and then we'll see

You conveniently forgot to answer my questions. How on earth could you possibly prove yourself correct? You do not know the intricate workings of the bank, nor their risk management process, nor their credit approval process etc. How could you possibly know what exactly they are looking at once the OP submits all necessary details?