Vusumuzi Profile picture
21 Feb, 10 tweets, 2 min read
Entrepreneurs can be considered high risk credit for long term debt because of the volatility associated with business income.

This can make obtaining a ‘bond’ difficult.

Here’s a few tips:

- separate yourself from your business
- keep accurate accounts
- save for a deposit
Most entrepreneurs make the mistake of treating their business finances like their personal finances - DON’T.
Determine a salary and pay this into a separate personal account each month.
Ensure that the salary is enough to sustain your monthly needs and be consistent each month for a period of at least 12 months no matter the ebbs and flows of the business.
Clearly mark the payments to your separate personal account as a ‘salary’. This creates a visible track record for anyone analysing your financials.
Pay for all your personal expenses from your personal account and keep your business affairs separate.
If the business makes additional income (PPE or vaccine windfall 🤷🏿‍♂️) which you would like to pay out to yourself. Don’t increase your salary, declare a dividend.
If you need to put money back in the business, clearly mark it as either ‘capital contribution’ or ‘shareholder loan’. Keep written records of this. It will help both you and your business.
Keep good and accurate details on your personal account. Allocate money to payments clearly so it’s easy to see what comes in a goes out. Try to retain a positive balance.
Save up for a deposit from your personal account. Again clearly mark the saving as ‘house deposit’. Also save up for costs and mark this clearly.
Banks like low determinable risk. They want to know that any loans extended will be repaid in full.
The best way to check this is by looking at your historical financial behaviour. This is not easy for most entrepreneurs as business can be very volatile and cyclical.
Separating your business and personal balance sheets could also be good for your business in helping you retain some cash in it by having a definite salary opposed to stripping everything out each month. Yes, this is an extreme example but it does happen. Sibuya khona.

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More from @SlwaneToYou

20 Feb
Although commonly referred to as the same thing. A home loan and mortgage bond are NOT the same thing.

In fact these are two separate agreements that are entered into.

The a loan and the other security over the loan.

A home loan is a loan provided to you by a bank to purchase a home. For this you enter into a loan agreement with the bank.

A mortgage bond is the security registered at the deeds registry by the bank to secure the home loan. This is a separate agreement that you enter into.
A mortgage bond is registered over the property because well the proceeds of the loan were used to acquire that property.

However, a bank may register a mortgage bond over your property for any other loan it provides to you including and a term loan, overdraft etc.
Read 7 tweets
19 Feb
If you are looking to buy a ‘second property’ based solely on the strength of the potential rental income of that property. Think again. Generally banks will not lend you money solely on that basis.

Here’s what you need to know:
The income generated from a second property will be taken into consideration on a discounted basis. What does this mean?
If the potential income is R8000 per month, banks will only likely provide funding to the value of R6400 per month, a discount of 20% (as a start).
Ultimately banks are lenders and lenders prefer low and determinable risk. Their core business is not to ‘help you’ but to write upfront fees, earn interest income and be repaid in full on all loans extended.
Read 9 tweets
10 Nov 20
Buying a new development to avoid transfer duty?

The simple answer is generally, no. Your first question should always be: Does it meet the Property Investment Principles? (pinned tweet)

Here’s a comparison between a new development in Tembisa (ema W) and Alex (ngase rank).
Both places are similarly priced and about the same size. Only difference is location.
You’d be ‘saving’ R30k in transfer duty & R845 in transfer and bond registration costs if you bought in Tembisa.
You would however be taking a massive risk on location. Like it or not Alex has the premium address in comparison, it is after all in Africa’s Richest Square Mile.
Read 10 tweets
20 Oct 20
COVID really did a number on my fitness levels. If you have fallen off the wagon and are trying to get back on:
- have a plan
- be consistent
- focus on the process
- build slowly

#Finishing2020Healthy Image
Put together a realistic plan that works for you and suites your fitness levels. Stick to the plan.

The are no instant miracles on the streets or in the gym, only honest time put in.
Get up each training day and put that run / gym session in, in accordance with the plan.
Be patient with yourself but avoid making excuses.
Read 5 tweets
15 Oct 20
Prospective tenants. Stay away from landlords/agents that charge you:
- contract fees
- credit check fees
- management/admin fees
- inspection fees
- agent fees etc

These are honestly operating costs associated with being a landlord.
Landlords, like I said before, this is a business and as such there will be operational costs. In order not to continuously incur fees and try pass them onto tenants, do things right the first time:
- get a proper base contract drafted (no, not by your 3rd year law school friend or uncle who specializes in criminal litigation)

- use 3 months banks statements to make initial affordability assessment
Read 4 tweets
13 Oct 20
1 and 2 are inextricably intertwined.

Madloti are spirit guides/angels that connect us with umvelinqangi (the supreme being and creator of all - God).
Religion is a very local concept based on how ‘small’ communities communicate with their version of a supreme being through their agreed practices.
Spirituality on the other hand is a far more wider concept of belief.

Everyone believes in something and manifests it through their chosen religion.
Read 5 tweets

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