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Confidential

Proposal by Dr D S Grieve On DR DS Grieve Bridging Solutions (Pty) Ltd Shareholding

For attention: __________________________

Dr D S Grieve 2-01-2008

Table of contents:

1.

Executive summary

page 3

2.

Introduction

page 4

3.

Typical financial examples

page 7

4.

Some of the standard procedures & a SWOT analysis

page 10

5.

Marketing & current clientele 5.1 5.2 5.3 5.4 5.5 marketing to current clientele new target market Agents Continued support General

page 11 page page page page page 11 11 11 11 11

1.

Executive Summary

Thank you for allowing me the opportunity to introduce you to my business. I have taken this presentation and divided it into a few sections allowing me to introduce myself, the plan, the projections, the returns, the concepts and the basic structure of the business. In concept my plan is to lend money to clients introduced to me by attorneys. All these clients should have a property transaction in progress. The principle allows for short term funding as a bridging solution for people wanting their proceeds sooner than their deals are registered at the deeds office. What makes this very secure is that at no time do I lend money without a guarantee being held from a bank, linked to an attorneys undertaking. As I will be discussing in detail later. There are three types of contracts/transactions I currently facilitate 1. Transfer duty bridging: This is where I charge the client a fee of 4,5% on the capital advanced for the contract and a further fee of R 1,60 per thousand rand advanced per day, after 30 days. 2. Transaction Bridging: ( Sale of Proceeds or sale of second bond funds ) This type of deal is where someone wants his or her property profits before the deal has been registered at the deeds office. For this type of bridging a fee of 4,5% is levied on the capital advanced. If the date of registration takes longer than 30 days a penalty fee of R 1,60 per day per thousand rand is levied. 3. Developers bridging: ( equity assistance for developers ) This type of deal is used to support developers where they are short on equity for a transaction, but have sufficient security to support the transaction. Rates vary between 3,5% to 5% per month. Depending on the transaction, the equity available will determine the exact rate.

I would not limit this business by only looking at these three types of contracts; however that is what has been working very well for the last three years. The net effect is a potential return of between 24% per annum to all informed shareholders who invest in this business. The initial intention is to raise 20 million rand from shareholders/ investors to give each shareholder a share in Dr DS Grieve Bridging Solutions (Pty) Ltd as to legally bring their money into the business in a share purchase or shareholders loan and then pay their returns out to them at a fixed rate of 2% per month as interest, and have it taxable in their hands.

Should a shareholder/Investor at any stage wish to withdraw his investment he would need to give a reasonable two to three month notice to withdraw his cash out of the business. Basically this opportunity gives the client the ideal chance to earn a good secure return on his money without having any sleepless nights. More details follow

2.

Introduction

A little about myself: Born: 28 August 1970 Matriculated: 1989 Studied the following: MBChB (General Practioner) Worked as such for 5 years while I studied further through Manchester Business School and did an AMP that included the following subjects: Financial accounting Management accounting Economics Business management Human resources Arrays of other subjects in the business field were also studied. Further to that I am enrolled in an MBA programme at Pretoria University. I left medicine and purchased Cynthias Restaurant (Maroelana) in 2003, which I have managed very successfully for the past five years, and have now sold this past year. I am also a shareholder and a member of the board of trustees of the Wilderness Protea Hotel. I also have been running a small bridging business with a debtors book of varying between R 4 -7million for the last three years, and this is the promising business I am referring to. I have already raised almost R 6 million rand for this business and some of that money is already working for my investors and me. Of this 3 million rand is my own funds and contribution to the business. I am looking at raising another R 20 million to invest in this project structure in the style that will explain itself as you continue to peruse this document. A little more about the business: I have structured the business in a Pty (ltd) company. The current structured company is also registered with the NCR(National Credit regulator). The plan is to give each shareholder a share. Each investors share will entitle him to a fixed 2% return on his investment loan to the company as a shareholder. Each investor or preference share holder will have the right to peruse the management statements and all financial records at all reasonable times. The full intentions from the outset will be, to have the books audited by an external auditing firm once a year and to have non-audited management statements available on a monthly basis.

The shareholder will be able to look forward to having management statements sent to him for a calendar month no later than the 15th of the following month and payments will be affected on the 15th of every month for the returns accrued in the previous month. I have already built up a fairly strong clientele and will easily expand this by the extensive marketing I am planning to do. Currently I have raised the following funds: 1. 2. Myself Investor 1 & 2 R 3 000 000-00 R 3 000 000-00

I am looking to find at least another R 20 000 000-00 or more to be used as already explained. I would also like to achieve this with as few investors as possible. I will have the books audited by PKF Auditors on an annual basis. My in-house auditor and I will handle all contracts and management statements. For reference purposes the auditors address and details are as follows: PKF Auditors (SA) Registered Charted Accountants Club ave Waterkloof

References to my business: 1. 2. Dawid Fourie tell: 0828924763 Jaapie Combrink tell: 0833571919

3.

Typical financial examples

A Typical monthly income statement would look something as follows. Income generated from a capital base of 10 Million based on an average of 4% per month. Income from profits, fees & Interest Income from contracts Gross profit Direct overheads Audit & book keeping fees Telephone & Fax Bank fees & interest Stationary & other Provision for bad debts Indirect overheads Gross profit Investors payments as interest at 2% Each shareholder is then paid his return based on his investment account. If he has R 2 Million in the system he would receive 2% giving him a monthly return of R 40 000-00 per month!!!! Not too bad! Profit retained after distribution To be applied to indirect overheads: Marketing Entertaining clients Petrol Cell phone Support staff Office rental, electricity, etc. Salaries Furniture Computers Fax machines, copiers Other, including my drawings R 180 000-00 R 400 000-00 R 10 000-00 R 410 000-00

R 5 000-00 R 2 000-00 R 1 000-00 R 2 000-00 R 10 000-00 R 20 000-00 R 380 000-00 R 200 000-00

Basically I will perform all marketing, entertainment, rentals and other overheads on my account. For this I take half the distributable income to cover the necessary expenses to perform the business and the remainder I draw out and leave the 7

company with a zero profit balance each year so that there is no taxable retained income in the business. This does leave all distributions taxable in each individuals hands. On the model currently presented we should achieve an average return of 24% per annum as a return for each investor, this is not a bad return considering the current money market rates are less than 8% per annum. This is obviously a before tax profit. What also makes this an attractive investment is that all loans are based on bank guarantees and/or backed by attorneys undertakings. If not, sessions and bonds are put in place over fixed property with sufficient equity in place. So the capital will be and is always well protected. Liabilities. It would be of good service to the company if an overdraft facility can be put in place to ensure that the entire capital amount can be used to build a debtors book of R 20million rand, than a small overdraft can ensure liquidity with the maximum amount of funds out to earn interest. This would ensure that contracts can roll over and that no clients have to wait for money to return before they borrow from us. This would in short ensure that every cent from each investor could work to the maximum for him or her self. A typical & idealistic balance sheet should read as follows (based on only 10 million invested): Assets Debtors book Current account (investors returns due) Total Assets Liabilities Members loan accounts Members returns due Total Liabilities

R 10 000 000-00 R 200 000-00 R 10 200 000-00

R 10 000 000-00 R 200 000-00 R 10 200 000-00

The main idea will be to keep the books as uncomplicated as possible. The overdraft facility will be a potential liability however that will have a positive net result for the following reasons: Allow for faster money movement. Allow for the roll over of contracts and then each investor would benefit from a slightly higher return. Would allow for every cent to be borrowed out and thus allow us to have a lower reserve level for current clientele. Would allow for higher earnings percentage

A cash flow for a 12 month period is attached as annexure B this represents the income and expenses anticipated for the next twelve months. However this is still subject to change as far as the tax component is concerned, that being if we need to declare a dividend as apposed to paying out a variable interest to shareholders, this is still subject to auditors investigation and will be detailed as soon as is finalised.

4.

Some of the standard procedures & a SWOT analysis

Monthly management statements would be generated and e-mailed to all investors Payments to investors/members would be made on the 15th of every month All contracts, undertakings would be available for all investors to peruse Any issue should be resolved through the companys auditors Any shareholder wishing to withdraw will have to notify us of his or her intention of such in writing and also resign as a shareholder of the company Such withdrawal could take up to 3 months to effect Occasionally a free agent may be used who will be given a commission for his duties however this will be seen as an out of contract arrangement and his commission would be in addition to our normal fees charged. Therefore it would not affect our profitability.

This list is also something that will be added to, on a frequent basis so as to keep all investors and financial institutions happy. Strengths: Quick & speedy results to clients Super fast turn around times on applications Easy secure way to generate a cash flow Can be managed with very little office space and fixed monthly overheads This investment is a cash flow investment Opportunities: Many attorneys looking for bridging solutions for their clients The whole country is our oyster, there is a massive demand for large amounts of money, for short term bridging Once a large debtors book has been built up, a bank will help with gearing to finance another 50-60% of the book to increase the returns dramatically Weaknesses: Other players in the market with lower rates Potential changes to the banking act that may affect our way of doing business Not enough capital for the demand, even though there are other players in the market place This investment is for cash flow and not for capital growth Threats: Interest rates changing could reduce the demand, however there are other financing opportunities available Other players as competition could place pressure on the demand.

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5.

Marketing and Current Clientele

5.1

Marketing to current clientele I would strongly focus on my current client on making them very happy with my service levels and to ensure that they talk to their friends so that word of mouth does the rest. My current customer list is small and can be easily extended given the extra capital. I currently service the following customers frequently with substantial debtors books in each of their practices: Bert Smith Attorneys Kondred Kunssman Attorneys Salti Verziano Vezi De Beer Peet Viljoen Buys & Partners Roux attorneys And a few others on a more ad hoc basis

5.2

New target market I have my eyes set on various practices for the new capital generated, and these are just a few of the first potential clients I will approach. Then any investor with any relation or connection to an attorneys firm is welcome to give me a lead and I will soon follow it up and show them why we have grown so fast.

5.3

Agents I have occasionally made use of agents too. This is where a third party is involved in brining in a contract, I normally charge an extra fee which is payable to the agent and this has no impact on our normal profit.

5.4

Continued support All these clients like to be treated and made to feel special. So the whole wine and dine thing becomes an important thing to do. So I need to treat them every now and again all these functions are financed out of my half of the profits and has no impact on the profitability to the investors

5.5

General The list of attorneys and clients to provide with bridging solutions is endless and carries on and on. It is not just my intention to stay in Pretoria looking for clients. I have a few leads into Johannesburg and will be focusing on the whole of Gauteng in this coming year and then the year after that perhaps the whole of South Africa. 11

One of the fastest ways we have grown was by referral and word of mouth, and on average we can grow by 2 million per month with almost no effort. So with some effort I would certainly get the desired result which would be to grow a debtors book of in excess of R 20 000 000-00, in fact my current debtors book is already over R 5 million and I am already having to show clients away, rather terrible I would say!!! Interestingly I have recently had good discussions with another bridging house in Johannesburg who only do large deals. My intention is also to structure a joint venture with them on larger deals so that my risk profile is kept in acceptable limits per transactions. All transaction above 500 thousand rand could be shared with them to split the exposure on any single deal; however this would only realise in 2008. I trust that this will be interesting reading for all. Thanks for taking the time to read through this summary of what I do. My contact details are as follows: Dr DS Grieve (David) E-mail: david@grievegroup.co.za Mobile: +2782 927 9734 Office: +2712 643 0498 Fax: +2786 689 9874 PO Box 12095 Clubview 0014 5 Larch Noek Zwartkops extension 4 Centurion 0157

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