Short Term Property Solutions
Fine words indeed. Of course, some may raise their eyebrows and see them as swaggering, but the success of the company is more than indicative of their truth.
Lewis Freidus is Chief Executive of Prevance Capital, and through his passion and commitment to the business, he has elevated the company to the top rung of the short-term bridging financing sector in South Africa.
Previously a CA(SA), he and his wife have a married son (who is an actuary) and a daughter completing her B.Sc (Hons). Having spent 10 years with Reichmans, which was listed during his tenure there and which was later sold to Investec, and then 4 years with Sasfin, also a listed company, he then moved to the Chester Finance Group (about 18 years ago), which was listed and then de-listed and which bought Prevance about 12 years ago. The Chester Finance trade finance division and was then sold to Cullinan Holdings in 2014; but Lewis remained as head of Prevance Capital, ably assisted by a staff of 9, including dynamic young marketing manager Christo Jonker who has been in the business for some 10 years and now become Lewis’ right hand man. The company, small though it is, has achieved amazing results.
During my interview with him, Lewis stressed more than once the concepts “short term”, “property”, “finance” and “solutions” as the defining characteristics of the business which operates nation-wide including transacting online, through their own custom built software portal. It was interesting and informative to learn things I had previously not known much about, from a man who knows his business inside out and then some.Prevance has two arms: that of “traditional” bridging finance, which provides 3 distinct products, and the second arm which provides business term loans
There are 3 products of the traditional bridging finance. The first encompasses finance offered to sellers of property, who need funding until the transfer takes place, which is usually in the region of three/four months; the second product takes the form of commission for the estate agents who are generally not paid until the transfer has been completed; and the third is that which accelerates payment of mortgage bonds from the bank during the interim period,
The niche term loans provided arise largely because of banks being notoriously slow and bureaucratic when it comes to granting loans to their customers. We’ve all been there – the red tape is onerous (though necessary), and for short-term loans banks are definitely not the road more travelled.
The loans offered by Prevance are short-term and property-secured; they are commercial in nature and are available not to individuals but to businesses which are legal entities. To quote Lewis, “We fund opportunities for people to open/extend their businesses.” The security which Prevance demands for these loans is usually a mortgage on a property – however the company strongly prefers not to take a mortgage over a primary residence as it is unpleasant to evict families from their homes. So Prevance rather looks as holiday homes and commercial and industrial buildings as security properties.
Short-term in these instances can be as long as seven/eight months, and the ideal size of loan is between R2million and R8million.
Lewis mentioned three main reasons as to why business clients approach him:
(1) to fund an opportunity which they recognise
(2) to kickstart developments – developers are usually funded by banks but if a little more is needed urgently to ensure the success/completion of the project, then taking a short term, that is immediately available may be the way to go
3) to bridge a short term financing gap.
While those are the most common reasons, there are infinite other possibilities for the use of the funds; and because Prevance works quickly, gives excellent service, and avoids the hierarchy that one has to navigate when approaching a bank for short-term loans, the company is definitely the organ of choice for business people seeking quick efficient solutions to their business financing problems.
I asked Lewis where his clients come from, and he replied that many of them are recommended by conveyancing firms who areaware of the cash flow problems that may be experienced by people waiting for their deals to be concluded. He stressed that he works only with honest conveyancers, who are the main source of new business for Prevance, and that’s where relationships are developed and strengthened.
Most of the company’s advertising is done digitally, and enquiries are received online and via the website. That seems to have been achieved, judging by its success.
According to both Lewis and Christo, Prevance is the perfect stopgap for homeowners and/or medium-size businesses needing short-term interim loans to help their dreams become reality. Its website is www.prevance.co.za and the company is based in Killarney Johannesburg.
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