Similar to the ongoing struggles that Community Schemes face with non-paying unit owners, large capital and maintenance projects require significant reserves which are not often held in cash. Community Schemes therefore, face the situation where they can raise a special levy and save up for the project or borrow funds and provide unit owners with the time to pay their special levy over a period of time.
The Income Energiser lending solution is utilised to fund arrear levy, project and maintenance funding needs of Community Schemes.
Income Energiser lending solution features:
|Minimum amount||:||R100 000.00|
|Interest rate||:||Prime plus 3.0% per annum, compounded monthly
Interest is capped at 20.0% per annum, compounded monthly, due to industry restrictions imposed on interest chargeable to levy debtors
|Interest payment||:||Interest is serviced (i.e paid to lenders on a monthly basis)|
|Repayment||:||Loans are typically repaid on an amortising basis over a period of five years
However, to ensure that lenders receive a steady interest income every month, BC Funding Solutions will automatically redeploy the capital portion of the monthly repayment to other Community Schemes for capital projects and maintenance and / or in respect of other Arrear Levy Debts subrogated in terms of Levy Guarantee Insurance Policies
On the fifth anniversary of the advance of the loan by the lender, lenders are able to select repayment on an amortising basis for the next five years, or choose to continue to automatically re-advance into the Community Scheme environments
|Underlying legislation and security||:||The Sectional Titles Schemes Management Act 8 of 2011, the Sectional Titles Act 95 of 1986, and the Community Schemes Ombud Service Act 9 of 2011, including important case law|
|Liquidity||:||Loans to Community Schemes are illiquid
The secondary market for this asset class is well established and sales can be facilitated by BC Funding Solutions, to willing buyers
|Fees and charges||:||None, all fees and charges are paid by the Debtor|
The Income Energiser lending solution is ideal for individuals, corporate entities and Trusts who are risk averse and require monthly interest income to supplement their living and / or ongoing business activities.