Traditional investments such as shares, unit trusts, endowments, bonds and even money market funds are all ultimately, directly or indirectly, linked to the stock market and investor sentiment. They are all therefore impacted by market corrections and suffer from downside risk. In addition, the investment manager's actions can also negatively impact the returns if they incorrectly engage with the stock market. A last point to note is that any managed assets attract fees, which also impact on the net returns. Investors usually ask the question "Where is it possible to deploy money in a manner which is as uncorrelated to the stock market and still earn a reasonable return?" BC Bridging Solutions (Pty) Ltd offers individuals the opportunity to lend funds to a Sectional Title Body Corporate and earn an interest return linked to the Prime lending rate. Importantly, this return is uncorrelated to traditional asset classes such as equities and bonds markets, or banks.
Download the Capital Growth Plan Application Form
Download the Monthly Income Plan Application Form
Download the Capital Builder Plan Application Form
View our product brochure
BCBS offers three lending opportunities:
1Capital Growth Plan - The interest rate will be changed to Prime plus 5.0% per annum.
2Capital Builder Plan - offering an interest return of Prime plus 7.5% per annum, compounded monthly (before tax):
Deployed as a monthly amount.
33. Monthly Income Plan - The interest rate will be changed to Prime plus 3.0% per annum
BCBS's lending opportunity offers individuals the opportunity to earn a Prime plus interest return in an environment where the placing and repayment of their funds, to their Body Corporate clients, is regulated in terms of the STA and STSMA. A Sectional Title Body Corporate is a defined legal entity and a unique borrower protected and secured by Legislation, contained in both the STA and the STSMA. Sectional Title Bodies Corporate are protected from insolvency in the form of Section S15B(3)(a)(i)(aa) of the STA and Section 15 of the STSMA. Section S15B(3)(a)(i)(aa) protects the income of the Body Corporate while Section 15 protects the rights of Body Corporate creditors. In terms of Section 15B(3)(a)(i)(aa) no transfer of a Sectional Title Unit can take place until the Body Corporate has issued a Levy Clearance Certificate ("LCC") confirming that all outstanding amounts owed to the Body Corporate, by the unit owner of the unit that is to be transferred, have been paid. This requirement protects the income due to the Body Corporate ahead of ANY of the unit owner's other creditors. Effectively the unit, the property asset, is unencumbered in the hands of the Body Corporate to settle all debts due to it. In terms of Section 15 the Body Corporate creditor is protected against any default by the Body Corporate by allowing its creditor to recovery their claim from each of the unit owners in their participation quota share. Lending to Sectional Title Bodies Corporate does not attract fees against the capital and interest advanced. That is, funds placed in this environment are not reduced by asset management or other fees.
What our funding clients have to say!
Client - Dainfern Ridge
I am not really sure what to say and in how much detail, but in simple terms, my opinion is as follows: "I have had funds invested through this company since July 2013 and in this short space of time, have been very impressed with the level of professionalism, sound knowledge of product and fantastic return that it offers."
Client - Fourways
Quite simply-this is possibly the best investment opportunity we have participated in. To date, the management and administration of our investment has worked perfectly!! - Regards.
Client - Craighall Park
Hi Peter - At the end of a volatile year on the stock exchange I can only thank you most sincerely for introducing me to the Body Corp peace of mind. I feel totally relaxed and confident that my future is secure and my retirement will be very well looked after by you and your colleagues. Many thanks once again. Kind regards.
Client - Brackenfell, Gauteng
This is a great reliable product that can be relied upon for phenomenal returns whilst protected by SA legislation and not an organisation.
Client - Howick, Natal
We are very happy with our bridging finance deployment - as pensioners it has made a big difference to our lives.
Client - Parkview, Gauteng
I am involved in two bridging finance deals, one paying interest on a monthly basis and one on a 5 year re-investment of the interest arrangement. These have been functional since October 2010 and have performed in complete conformity with the product specifications thus far.
Client - Craighall Park, Gauteng
Just a short note to thank you for allowing me to participate in the bridging finance plan. I have found it to be very effectively run with statements and sms's arriving regularly and promptly each month. The best part is the good news of the amazing interest earned each month. Many thanks once again.
Client - Randpark, Gauteng
Although new to this investment, I am happy to say that the returns have been exceptional and I look forward to watching it grow month-on-month. What gives me confidence is that it is protected by SA law and I endorse BCBS.
Client - Benoni, Gauteng
Cautious at first, however now that I am "on board" - totally convinced this is a winner for all who want a distinct safe investment opportunity. Thank you!
Client - Woodmead, Gauteng
This product delivers real returns and the reporting is user friendly and effective.
Client - Roodepoort, Gauteng
As a person wanting to retire in the next couple of months we have found a product that offers security via protections offered by the current legislation in the Sectional Titles Act and yet it offers fantastic returns not offered anywhere else.
Client - Isandovale, Gauteng
My research has indicated this to be for 'risk-averse' investors that still want a good return on their investments.
Client - Randpark Ridge, Gauteng
We are very excited to be part of this unique investment opportunity! We are pleasantly surprised with the consistent growth over the first few months since investing.
Frequently Asked Questions
Is this not a case of "High Risk High Reward"?
Definitely not! Risk is limited due to the legislative protections (The Sectional Title's Act 95 of 1986 and The Sectional Titles Schemes Management Act 9 of 2011) afforded to Bodies Corporate in the recovery of their debtors and in the repayment of their creditors. Effectively the Act provides fixed property assets, namely all the units within the entire development, to protect the Body Corporate's income and the debts due to its creditors. The earnings generated are in the form of interest and hence are NOT subject to financial market performance, which carries various levels of risk, but rather is linked to the prime lending rate. This lending opportunity is designed to maximize your return whilst minimizing risk.
How secure are my funds in this environment?
Loan funding to Bodies Corporate is protected by the Security Cession (whether by Notarial Bond or regular cession in securitatem debiti) given by the Body Corporate. The effect of which is that the lender’s claims, as well as the local authority and any other claims which are “costs in the cause”, are recovered before those due to other Body Corporate and unit owner creditors, including the Receiver of Revenue and Mortgage Bond holders. In addition, ALL units within the entire development provide security, in proportion to their participation quota share, to the lender’s claims. This is in accordance with section 15B(3) of Sectional Titles Act and section 15 of the Sectional Titles Schemes Management Act. These Acts which make this legal entity an absolute unique borrower.
What is the maximum loan duration for this product?
One of the main factors, generating this loan finance opportunity, is the inordinate delays, experienced by Bodies Corporate in recovering their levy debtors, in our courts. This, despite the fact that Sectional Title Body Corporate levies are a legislated expense (not a good or a service) secured and protected by legislation. The various legal processes which need to be followed to recover arrear levies tend to currently take an average 5 years. Given the individual financial status of each levy debtor it is impossible to forecast a specific levy recover date and hence loan repayment date.
Can you switch from a Capital Growth Plan to a Monthly Income Plan when circumstances change?
This is only possible if a willing Capital Growth Plan funder exists to purchase your Capital Growth Plan loan asset.
What happens if I need to withdraw prior to the repayment of the loan funding by the Body Corporate?
Early exit from this lending opportunity is not generally available unless the Body Corporate collects its levy debtors and repays its loan. If circumstances force the Purchaser to request early exit, the Purchaser acknowledges that they will incur an early termination cost equal to 10% of the amount to be repaid to The Purchaser. This cost is payable to offset expenditure incurred in the original placement and subsequent sale of the Purchasers claim against the Body Corporate. The Purchaser will be required to wait until his / her Sale of Claims (the asset) is sold, by his or another Independent Consultant, to a willing buyer.
If we have a 100% allocation of our money on a deployment, who pays BCBS and the independent consultant their fees?
The costs of the loan are levied on the Body Corporate. This includes a raising fee and monthly loan administration fee payable to BCBS for monitoring the collection service providers and managing agent.
Can the Body Corporate repay the loan at any time and can one redeploy the amount repaid?
Yes, the Body Corporate can repay the loan in full or in part at any time. Yes, you may redeploy your repaid funds subject to the minimum loan amount.
Is the Monthly Income Plan a permanent annuity type of income?
No it is not permanent. As soon as the Body Corporate repays part of the loan so it may affect the income being received on the outstanding balance of your Monthly Income Plan loan. The Purchaser can redeploy repaid amounts back into the Monthly Income Plan to retain your level of interest income, subject to the minimum loan amount.
What happens if the retention amount that the Body Corporate is required to hold in the cash custody account is depleted and is no longer able to service the interest payable each month to Monthly Income Plan lenders?
BCBS ensure that the Body Corporate set aside funds in the cash custody account to service Monthly Income Plan loans. If repayments occur, these funds are first replenished before any capital repayments are made to lenders. Thereafter, repayments are distributed to clients. In the event that the funds deplete, the Body Corporate is required to raise a special levy or borrow additional funds to replenish the funds.
Why does the Monthly Income Plan offer you a lower return?
Because the Monthly Income Plan is a serviced loan, whereby the Body Corporate is obliged to service interest on a monthly basis, as well as the fact that the Body Corporate has a reduced loan utilisation %, having to set aside 30% of the initial loan amount in the cash custody account to service this interest, the cost of this form of loan funding was reduced.
BCBS offers three lending opportunities including the Capital Growth Plan, Monthly Income Plan and Capital Builder Plan, how do they differ?
The Capital Growth and Monthly Income Plans are lump sum lending opportunities, whilst the Capital Builder Plan is a monthly lending opportunity. Interest is compounded on a monthly basis on the Capital Growth and Capital Builder Plans, whilst interest is serviced by the Body Corporate on a monthly basis on the Monthly Income Plan.