BUSINESS PARTNERS Limited has made a finance option available to assist business owners to obtain their own commercial premises or develop their own commercial property. In addition Business Partners provides capital to developers on a profit sharing basis where a proposed development can be realised within a reasonable time.
Business Partners is a private equity company at the forefront of entrepreneurial development in South Africa, with the stated mission of investing capital, skill and knowledge into viable small and medium enterprises. The company offers a wide range of investment, property, venture capital and equity products tailored for SME's, as well as post-investment mentorship services.
Its focus is on enterprises requiring between R150 000 and R15 million to finance land and building, start-up phase, expansion or development.
Two innovative property investment products have been designed for those entrepreneurs who want to own business premises but have limited own contribution, or do not want to deplete their operational entity's cash resources or who are unable to raise the deposit required by other financial institutions. Another opportunity exists where the entrepreneur has a viable multi-tenanted property which poses an investment opportunity with an above average return on investment.
Nazeem Martin, Business Partners general manager, says it often makes good economic sense for a business to acquire its own premises. 'While renting premises has the advantage of greater flexibility and cash flow retention in the operational business, the problem for many SMEs is that long term tenancy is not guaranteed', he says. 'Property can also be a good entrenchment for inflation, does not need continuous attention and can be contracted in various ways. It therefore is a popular investment especially for SME's', he continues.
'Often financiers do not grant a 100% loan to buyers,' says Martin. 'However, if potential clients do not have an own contribution for the balance they can approach Business Partners'.
There are many reasons why medium term financiers put a premium on property as the most acceptable form of security for loans, according to Martin. 'Property ownership lends itself to a position of confidence which puts you in favour of financiers, it is tangible security of which the value can be established fairly accurately in various ways. It gives credibility to the lender who normally also conducts business from it which definitely plays a role when the risk of an investment is considered'.
SMEs opting to acquire their own business premises stand to benefit from proximity to their market and the goodwill which often evolves directly as a result of their business location and the synergy it derives through being close to the community and complementing businesses. By purchasing a property the entrepreneur will in time gain full ownership, giving him/her an asset capable of rendering a return in the form of a pension for retirement planning. The expansion requirements of the operational entities might be in the nature of capital expenditure in terms of fixtures such as carpeting and lighting which serve to enhance the value of the property. In addition ownership enables long term planning and control in terms of utilisation, subletting and tenancy mix, thereby offering alternative means of optimising cashflow and capital appreciation.
'The financing, enablement and support of SME's is one of the most significant challenges facing the country today,' said Martin, 'and Business Partners is at the forefront of meeting this challenge.'
'Business Partners already has an impressive track record and we are continuing to build on that foundation as we move into the future.' In the nine months ending December 2001, the company invested R369,5 million in entrepreneurial businesses across the country, facilitating the creation of 8 008 new jobs. Since it's inception in 1981 it has invested an impressive R4,6 billion in private equity into emerging new businesses, enabling the creation of nearly 500 000 new jobs. The company's current investment portfolio stands at R1,3 billion.
Publisher: Cape Business News
Source: Cape Business News
New option from Business Partners Ltd
Posted On Tuesday, 12 February 2002 03:01 Published by eProperty News
BUSINESS PARTNERS Limited has made a finance option available to assist business owners to obtain their own commercial premises or develop their own commercial property.
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