Frequently Asked Questions

What is the Difference between a direct contract and a sub-contract?

A Sub-Contract is when the main contractor for a job gives work to another company i.e. it is a contract that assigns another party to some or all of the obligations of a prior contract.

What is the need for a business asset register?

A Business Asset Register is a list of all income – generating assets that are either paid off or under instalment sale / lease agreements.

The reason that this is essential to your application is:

*It assists in assessing your monthly obligations to other
institutions and assessing what amount of free cash flow is left for the applied for finance

*It also shows what cash will be available in the future (i.e.
if there are finance arrangements nearing the end of their terms, that cash flow will soon be available)

*It shows the unencumbered assets that are available as security
should the bank require such

Why do the banks ask for deposits?

A deposit is given as a “partial payment” or as initial upfront payment required by the bank to reduce the risk and demonstrate the clients commitment to the finance obligation.

There are instances when the institutions require higher deposits such
as:

*The equipment is specialised in nature

*The client is viewed as being higher risk or their financial
position is not favourable 

*The industry that the asset is working in is a high risk
industry

*The application is too rich for the client – the deposit will
then make the monthly obligations less. 

The need for a cash flow projection?

A cash flow projection shows the expected cash inflows and out flows of your business directly relating to the purchase of the asset. I.e.
income and expenditure for the asset.

This is required in order to fully assess the positive impact the purchase of the asset will have on your organisation.

If you are unsure of how to draw up a cash flow projection, do not hesitate to contact our head office and one of our analysts would gladly make an appointment to assist you with this.

Why does Zeal Finance ask for so much information, I thought the application process is quick and simple?

The various institutions do not assess an application on financial information only.  They take other factors into consideration, such as the current risk in the industry, the directors / shareholders / management’s experience in the industry.  They are also obligated by law (FICA : Financial Intelligence Centre Act) to obtain certain information.

In addition we would like to present your business in the best possible way to the various financial institutions and the better we know your personal, business, contractual and financial position the better our motivation.

We do not ever want to jeopardise your application at any financial institution so we only want to present the best.

Why use Zeal If I can go directly to the institution myself?

Zeal Finance has access to numerous financial institutions offering a variety of  financial products. To apply to all of these on your own would be time consuming.  Zeal Finance also has a team of qualified, and experienced professionals working on your application.  They have built outstanding relations with the relevant personal at the institutions, and have obtained the knowledge of how to best present your application in the most favourable manner.  We also have the ability to negotiate for the best terms and conditions for your organization.

What if I have a judgment or ITC against my name?  Can I still apply for finance?

Yes, you can, depending status of the judgment and on the severity of the judgment.  If you are unsure, rather call one of our friendly analysts who would best be able to advise you on your individual situation.

What do we mean when we talk about gearing?

Gearing is the financial ratio that compares the owner’s equity (or
capital) to the borrowed funds.  This is a means to calculate the financial leverage of a firm i.e. the degree to which a firm’s activities are funded by the owner’s funds versus creditor’s funds.

The higher your gearing ratio (i.e. the higher your degree of leverage) the more risk your company takes on.