BizNis Africa
Latest News
Making Africa Work handbook unveiled at Tana Forum
Earlier today, 22 April 2017, the Brenthurst Foundation launched...
MTN SA, Huawei trial Africa’s first LTE Licensed Assisted Access
MTN SA, in partnership with Huawei, successfully trialed Africa’s...
Africa50 appoints new Chief Operating Officer
Africa50, the pan-African infrastructure investment platform capitalized by the...
Ramesh Awtaney to speak at London Business School Africa Business Summit
Ramesh Awtaney, a visionary Indian-African entrepreneur, investor and philanthropist...
Barclays Accelerator announces top 10 fintech companies
Barclays Africa Group and Techstars on 20 April 2017,...
The Role of PR in lead generation
With the economy in a state of unprecedented instability,...
African Development Bank is delivering for Africa
In an impassioned speech delivered at the Center for...
New JSE listed Big50 offers Pan-African investment opportunities
The listing on 20 April 2017, at the Johannesburg...
Radical economic transformation debate in South Africa rages on
Talk of radical economic transformation, a concept that has...
African developers honoured during the Facebook annual F8 conference
Facebook celebrated the achievements and products of its growing...

Gary Palmer, CEO of Paragon Lending Solutions

Self-employed individuals in South Africa are finding it increasingly difficult to obtain finance to secure transactions from traditional lenders, as they are viewed as high risk candidates with unpredictable earnings. As a result, the growth potential of many of South Africa’s self-employed individuals is being hindered.

This is according to Gary Palmer, CEO of Paragon Lending Solutions, who says that as a result of the strict regulatory environment he has witnessed an increase in the number of unsuccessful loan applications by business owners regardless of the full business potential of the client.

“South Africa’s banking sector has tightened up its regulations around the lending criteria to self-employed individuals arguing that their earnings are volatile, despite the fact that some self-employed individuals earn more than employed, and as such self-employed individuals are increasingly making use of alternative lending solutions by non-bank lenders who are providing much-needed cash flow to take advantage of opportunities.”

Palmer says that by cutting out the red tape often experienced with traditional bank loans, self-employed individuals have quicker access to funds in shorter time periods, allowing their businesses to grow.

According to Palmer, the perceived risk of being self-employed is much greater in South Africa than in other parts of the world. He points to Australia’s general views on self-employed individuals. “In Australia, self-employed individuals are looked at in a different light. They are seen as more secure and financially stable. As South Africa’s economy isn’t as stable as first world economies, self-employed individuals are simply seen as ‘riskier’ candidates.”

He says that the requirements are more complex for banks when reviewing employed vs. self-employed individuals’ loan applications.

“Lenders are more inclined to grant loans to those who have demonstrated financial discipline in the past. Banks decisions are also based on how they understand an individual’s finances, their business and their ability to pay back the loan. Therefore, the best advice I can give to a self-employed individual looking to obtain finance is to have their financials in order, as it demonstrates the strength of an individual’s business, and confirm whether the business will be able to pay the self-employed individual a justifiable salary, in order for the individual to have enough cash flow to repay the loan.”

Palmer advises that self-employed individuals looking to apply for finance have the following documentation in place:

– Six months’ bank statements;

– A comprehensive income / expenditure statement for the business;

– The latest business and/ or personal financial statements; and

– Management accounts for the current year, all verified by a qualified professional.

Comments are closed.

Ver peliculas online

Fill in your details below and we will secure you a free test drive, delivered to you.

Fill in your details below and we will secure you a free test drive, delivered to you.

%d bloggers like this: