Jacob Lukhele

Witbank (ZAF)
Role(s):
Founder/Owner/Principal

Kbe Bridging Finance (Franchise)

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Location: Witbank
Industry: Finance
Year Founded: 2007
Number Employees: 1-10 people
Business Stage: Growth (profitable)
Entity Type: "C" Corporation
Description: Sector: Finance Location: South Africa Transaction Size (in US$): US$100,000 Funding Stage: Early Stage Financing Preferred Exit Option: Strategic Sale Kbe is a Bridging Finance Company, without the expense and risk of providing your own capital to service your clients’ bridging and other financial needs. You will be in business for yourself but not by yourself. Proposal Summary: The business has various income streams or products/services namely: bonds, credit bureau bonds, invoice factoring, home rescue, debt consolidation, equity release, floor plan finance, bridging for property developers, estate agents and pension/provident fund bridging. Bridging financing is not a populated space, just like real estate. There are literally few of bridging services in the Johannesburg and Pretoria metropolitan area. Although the financial market is pretty full, there is room for new providers that specialise and offer unsurpassed customer attention and products. Competition comes from many different sources: The buying patterns of consumers are more often than not based on networking or who the person knows. This is because the industry of financial planning is so populated it is quite hard to make a decision for choosing a service provider. Since many/most people after a certain age have at least visited a financial planner it is not difficult to get a referral for a bridging finance planner. Kbe sales strategy will be to emphasise their competitive advantage of comprehensive research and product offerings. This is likely to turn prospective clients into long-term customers because people are often cautious with their financial future and offering a comprehensive solution will likely allay their concerns because Kbe has worked extra hard to research all options. Additionally, Kbe possesses the necessary skills to produce the high quality products that are needed in this field. The South African credit market it was valued a year ago at R360 billion, which is approximately 60 billion US Dollars. This business has no credit bureau checks, its risk free since the loans are short term and secured on property or asset offered as security. If the clients default on the loan the lender can use the assets to get their money back. -------------------------------------------------------------------------------- Management Team: Franchisee, Jacob Lukhele entered the casino industry a year after graduating from Greendale school. During the second year Jacob was allowed to choose his courses and he took a concentration of finance, investing, options, etc. He enjoyed the investing of money, and it was at this point that he realised that this is the type of work that he wanted to do. He figured it would be initially tough to start his own financial bridging company by himself, but with a bridging finance franchise, he is prepared to go ahead with his dream. -------------------------------------------------------------------------------- RETURN ON INVESTMENT: The exit strategy will be based on selling/merging Kbe Bridging Finance with a top financial institution. Sometimes, two businesses can create more value as one company. I believe such an opportunity exists for this business, then a merger may be my ticket to exit. I don’t want to relinquish all involvement, I will consider staying on in an advisory role. I will also negotiate for equity in the buying company, allowing me to earn dividends afterwards — clearly it's in my interest to ensure that Kbe is a good fit for the buyer and therefore more likely to prosper. Benefits of the investor will be based on the following negotiated agreements: As an investor you will get from a 5 to 25 percent stake in the business and possibly a consulting role, good communication reports that will be forwarded to the investor on quarterly or weekly updates, return objectives will range from a projected internal rate of return of 20% over two years to sales projections of US$1.117.453 in the first two years to the potential return of twice the investment in the first two years, I won't take or make vital business decisions without getting an approval from the investor and most of all,I will take my time in forming a relationship with the investor. Since we are going to be spending a number of years together at a critical time in our business' lives. -------------------------------------------------------------------------------- Projected Financial Information: Year Turnover Operating Profit Year 1 US$387,167 US$193,574 Year 2 US$431,818 US$208,451 Year 3 US$476,461 US$238,214 --------------------------------------------------------------------------------