In 2009 James* finally realised his lifelong dream. He bought a property in the Eastern Cape and converted it into a guesthouse. James had invested in property before but running a guesthouse had always been his goal and, with an Absa home loan, he had made his dream a reality.
It was a small guesthouse, with just a few staff members. James had thoroughly researched the area and his market and as a result the business flourished. The way he ran his business was unique. He focused on being profitable and supporting and growing his employees. James’ hospitality extended to more than just his guests!
But, in 2017, things took a serious turn. The guesthouse started to lose money. Contract opportunities with government had begun to decrease while business expenses began to increase. Eventually, he was unable to make his home loan repayments on the guesthouse.
James faced a serious problem. He could sell the property - that would cover his home loan and business debt. But to him, this wasn’t an option as closing the business would mean all his employees would be out of work. The thought of his staff facing unemployment kept him up at night - he needed to find another solution.
James reached out to us. We sat down with him and explored what his options were. HelpUSell and Private Sale would allow him to easily sell his property and solve his debt issues. But he did not want to leave his staff in dire straits - not if he could help it. So we re-examined his situation and decided to renegotiate his home loan agreement.
Renegotiating his bond meant he would be able to keep the guesthouse afloat and his staff employed. James was then able to repay his loan at a reduced monthly repayment over a longer period. His repayments were less so he had more time and money to rebuild his business.
The plan worked. With an easier payment schedule, he had the ability to realign his business. Today, the guesthouse is doing even better than before. His focus is less on government workers and more on tourists, both local and international.
In fact, he even had to hire more staff to keep up with the new demand and the new services he offers. Best of all his commitment to himself and his employees plus a little bit of help from us meant he could continue providing for his employees, himself and all the visitors that he now caters to.
*not his real name
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