Where can i get a loan to start a business and refurbish a house

[Rocket-Boy]

Sorry but to be blunt this is just stupid.

Doing up a house for R750k - the house better be worth at least a few mill and the bank is never going to hand this over to someone with little employment history. In fact I'm willing to put money down on a bet that they will laugh at you for bringing this up. I really doubt you earn enough each month to pay this back alone. "refurbish my mom's house (in the townships) no more that (it's than not that) R750k" - Just the way you go about asking these questions shows you have put little to no thought into this at all. Did you wake up this morning and think "hey, let me get a huge loan to buy some cool **** for my moms yo!"? Never mind the amount of time and money it would take to pay back a loan like this.

Let me put it into perspective. The cheapest type of loan you will ever get is a home loan. My home loan is now sitting at 8.75% and it is for R544 000.00. I pay back on that R4800.00 p/m. a personal loan will likely be in the range of 20%-40% meaning you will be paying a hell of a lot more than R4800.00 p/m just on R750k.

You've barely just entered the workforce and already you are doing the dumbest thing possible by trying to rack up a maximum amount of debt in the shortest space possible. Go to work, save your money and when you can afford to, do some mods of your moms place or buy her some furniture. If you don't have the cash on hand you can't afford to buy stuff - end of the story! Personal finance is a very simple thing, don't spend more than you earn. It's the biggest problem with everyone now and the instant gratification culture. Do yourself a favour and get these ideas out of your head now. Maybe you feel like you owe your mom something but I'm sure she will appreciate it more in 20 years time when you can get her something nice while driving that BMW you paid in cash for. Imagine if you lose your job tomorrow - how do you plan on paying back R1.25m?

I doubt you have any kind of constructive business plan together either. Contrary to popular belief "I want to get a loan to start a small business, R500k should suffice" will not fly with a business loan banker. If you had done the proper planning you would already know exactly how much you need. Don't tell me you have a business plan already because just by saying R500k should suffice I can tell you straight off the bat they won't even entertain what you've written. Trust me on this one - I used to work for people that gave out business loans and bought businesses for a living (venture capitalists).

It might come across as harsh but its sound advice.
Bottom line is you need a bond for the house upgrades and you need a business loan(which starts with a business plan) for the business side of things.

 

[ToxicBunny]

Hi OP

If it makes you happy to make your mum happy by refurbishing her home, then do it. Go take a loan and make it happen. One day when your mum is gone, Don't have regrets about not doing it. Plan it carefully and execute it.

On the business, if you believe your idea can fly then do it. If the idea fails, learn from it, pay your school fees and move on.

Good luck. Hope you find the resources you need and live your dream.

Thankfully the banks don't operate the way you think they do..

They won't give him the loan for the renovations if he doesn't have security for it..

They won't give him a business loan unless he has a solid business plan to back it up.

 

[Mila]

I went through this with a banker this weekend. A small start up loan.

Firstly go see a business banker. Consultants works with investments and policies.

Secondly, the bank will not loan you money if you don't have assets. And they mean a house.

Do you have a solid business plan? Write one.

Try the National youth development plan for your business. You will need a solid business plan for that as well.

Vampire's advice is good. Yes it is hard, but it is tough out there and it is no use sugar coating it.

 

[borga]

Thankfully the banks don't operate the way you think they do..

They won't give him the loan for the renovations if he doesn't have security for it..

They won't give him a business loan unless he has a solid business plan to back it up.

And seeing as the house belongs to his mother, he may not have any security, the fact that the house is in a Township could also indicate that the house is currently not the R500k worth.

For the Business loan I believe you will require a business plan and contribute a portion to the business from your side too, the OP may not have that capital, this in addition to the above loan seem unlikely as the OP unlikely have sufficient earnings or asset base for the bank to provide him with the funds.

 

[Mila]

You have to contribute 10% or more of the loan.

And a loan is repayable in 5 years at prime plus 3.

 

[depadepo]

Thanks for the input everyone, duly noted.
Reality check: No reputable org will give me R1.2m.
Best option: homeloan for mom's house and a separate business loan.

 

[Mila]

Yes. Start your business plan. Then take it to the business banker. They helped me with the places I needed to improve on and gave great advice.

Also check out:

http://www.sefa.org.za

And try the youth development thing, if you are under 35 you can maybe score big time on your business loan.

Good luck.

 

[depadepo]

Yes. Start your business plan. Then take it to the business banker. They helped me with the places I needed to improve on and gave great advice.

Also check out:

http://www.sefa.org.za

And try the youth development thing, if you are under 35 you can maybe score big time on your business loan.

Good luck.

Thanks Mila, much appreciated.

 

[ToxicBunny]

Thanks for the input everyone, duly noted.
Reality check: No reputable org will give me R1.2m.
Best option: homeloan for mom's house and a separate business loan.

More detail : You need security for the homeloan, and you may not get it with only 1.5 years working history. The house may not be securable given its location in a township, it may also not be valued at R500k, and if its not R500k then you won't even get close to the R750k homeloan. You won't be able to register a bond on the property unless it is in your name either.
Business loan will require minimum R50k capital input from you for a R500k loan, you will need a solid business plan as well before they will even consider it.

 

[Bar0n]

I want to get a loan to start a small business, R500k should suffice and at the same time I want to refurbish my mom's house (in the townships) no more that R750k. So I need R1.25m cash that I will manage myself.

Have you calculated what your monthly repayments will be? What interest rate are you bargaining on?

 

[lholhos]

Eh bra, I know you feel obliged to do something for your Mom since your Mom probably struggled to put through varsity. I am probably was in the same situation. See, my mother did not have a place to stay and she rented a backroom. it is not nice to see your 'struggling' like that. I decided to buy a bond for 'US'. She is retiring in two years. She never did anything for herself as she had to take care of her siblings, put them through school, she is oldest.

Wena you want to go the same route of acquiring huge debt to 'help' someone and you just started working. Don'T do it. Say you were to get the loan at 8.5%. you looking at over R10000 p/m to service that loan. That means you can be able to that amount. How about you start saving that R10000 from this month.
Refurbish a kasi house for R750K? Double storey maybe?

Do not do what the society expects you to do. I am currently unlearning what this society taught me and now I am a weird but I'm enjoying being weird.


Also if you feel very confident about your business plan, get the business loan and use the profits to rebuild your home.

 

[lholhos]

Hi OP

If it makes you happy to make your mum happy by refurbishing her home, then do it. Go take a loan and make it happen. One day when your mum is gone, Don't have regrets about not doing it. Plan it carefully and execute it.

On the business, if you believe your idea can fly then do it. If the idea fails, learn from it, pay your school fees and move on.

Good luck. Hope you find the resources you need and live your dream.

Well people have different dreams, But how many dream to be in debt for the rest of their lives?

 

[ToxicBunny]

Eh bra, I know you feel obliged to do something for your Mom since your Mom probably struggled to put through varsity. I am probably was in the same situation. See, my mother did not have a place to stay and she rented a backroom. it is not nice to see your 'struggling' like that. I decided to buy a bond for 'US'. She is retiring in two years. She never did anything for herself as she had to take care of her siblings, put them through school, she is oldest.

Wena you want to go the same route of acquiring huge debt to 'help' someone and you just started working. Don'T do it. Say you were to get the loan at 8.5%. you looking at over R10000 p/m to service that loan. That means you can be able to that amount. How about you start saving that R10000 from this month.
Refurbish a kasi house for R750K? Double storey maybe?

Do not do what the society expects you to do. I am currently unlearning what this society taught me and now I am a weird but I'm enjoying being weird.


Also if you feel very confident about your business plan, get the business loan and use the profits to rebuild your home.

Good man that you're "unlearning" the bad habits that society has... it will serve you well in the future and help you look after your mom even more in the future.

 

[Viva]

Getting a loan to refurbish a house is a very very bad idea. There will be no return on that investment, and you will forever struggle to get financially ahead while carrying that burden. Simply put, that is doing things the wrong way around. You only spend money on luxuries and improving your and your families lifestyle once 1) you have already earned that money and 2) you are prepared to grow your assets at a slower pace.

Always remember that in general, wealthy people are wealthy not just because they earn big salaries, but because they make good financial decisions. Refurbishing your mom's house when you can not afford it is not a good financial decision.

 

[depadepo]

Refurbishing your mom's house when you can not afford it is not a good financial decision.

Also if you feel very confident about your business plan, get the business loan and use the profits to rebuild your home.

Back to the drawing board, put mom's house on hold for now and focus on getting the business up and running.

 

[Viva]

Back to the drawing board, put mom's house on hold for now and focus on getting the business up and running.

Good, your future you will thank you

 

[midnightcaller]

Well people have different dreams, But how many dream to be in debt for the rest of their lives?

Money and debt are all man made constructs. Money comes and goes.