Favorable shift for small business owners in the home loan market

Since the global recession that hit both the developed and developing world in 2008, most people have been quite conservative when it comes to getting into any long term financial commitments. 

 

It is estimated that around 24% of applications for home loans in 2007 were submitted by individuals who generated income independently through their own businesses.

 

Even though that percentage dropped to around 12% since then, the average loan granted to these individuals - small business owners and entrepreneurs - is significantly higher than those granted to their counterparts who rely on a salaried income. 

 

According to the head of First National Bank’s Home Loans department, Ewald Kellerman, this increase is likely due to the fact that entrepreneurship comes with increased risk/reward return factors. 

 

However, banks and financial service providers must surely still be wary of all the risks that come with loaning money to individuals with small businesses.

 

Apart from the fact that the global financial situation is still not stable enough to make owning a business stable, no matter the size, there are a lot of factors that could influence the success of a business, and with that, the owners ability to pay off a home loan. 

 

Many businesses fail within the first year, and those that survive may not be financially viable for a year or two more, so home loan providers must be sure that any applicant has a stable enough income to cover their expenses during that period. 

 

On the other hand, if an applicant is successful enough, the loan will likely be paid successfully and in some cases even early.

 

While it is still a huge risk for banks and other providers to provide home loans to self-employed individuals, this trend that sees these business owners being rewarded for hard work and risk taking shows that there is more confidence on the part of the banks, as well as willingness to inject capital into a growing market.

 

Written by: Wesley Geyer

Why your business needs a website

Many businesses were established before the technological era and are still running a successful company without the additions that the technological age brought us. 

 

Online marketing is still a foreign idea to many small to medium business owners and others simply feel it is too complicated. 

 

Today we’ll look at probably the most important aspect of online marketing – websites – and why it has become crucial for your business to have one.

 

The first reason for your business to have a website is the fact that your competitors have already positioned themselves online. And no, “everyone else is doing it” is not a reason to do something, yet it is important to note that the reason why most businesses are online today is because that is where everyone is looking nowadays. 

 

The fact that some other company is getting business that you could be getting should be a great motivator.

 

When you look at all the different information you can place on a website, it’s probable that the same information is repeated by your staff to customers on a daily basis. Imagine what your staff could be doing if they weren’t busy on the phone to inform customers of trading hours, locations, products on offer and their price or whether your stock a specific item. 

 

The time you save could mean more to you than you think. It also means that your customers have unlimited access to your information without you having to put in the time for it.

 

You might think your business does not have an online presence, but with social networking expanding on a daily basis, there is a fantastic chance that your business has been discussed and reviewed somewhere online.

 

It might be an unfortunate truth, but a customer who may have had a bad experience at your business is more likely to rant about it online than he is to approach you. Being online gives you the chance to defend yourself or make sure you address the customer’s bad experience.

 

The internet has taken over in so many different areas of our lives. It has redefined how we do things and makes an impact on everyday decisions like where to eat or which shop to visit. 

 

Having a website ensures that your business can be located and that the customers from the store not far from yours, may become your customers.

 

Written by: Marleen Theunissen