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Have you ever failed flat in business?
Rank: New-farer Joined: 10/14/2016 Posts: 25 Location: Nairobi
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This is insightful, have been on the sidelines far too long. I started wheat farming in Njoro near Egerton doing 10 acres, the first year was good, my brother was managing the farm. The second year we decided to do 30 acres, we didnt get the first harvest courtesy of stupid quelea birds who invaded the farm, the second season flash floods finished us completely, total loss around 600k. The following year we down scaled and did 10, my brother was no longer available so i entrusted my cousin, and bang that was the end of my agribusiness journey. Trying to do other different things here and there. As others noted here, family....rethink.
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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FRM2011 wrote:mkeiy wrote:FRM2011 wrote:@bigchick, ur friend's predicament isn't that bad actually. Her facility is cash covered and the approval authority rests with her branch manager.
Tell her to engage them. At the very worst, she will "clear" the loan by depositing the outstanding balance and within minutes a new loan will be disbursed with the same security.
She has learnt her lessons and she will make a killing in the second attempt.
My branch manager can authorise a loan of up yo 10m within minutes if it's cash covered. @FRM2011, How does that work? If you have 1m in your bank account, and you want to invest 1m in a business, the way I do it is open a fixed deposit in the bank and use it as security to borrow 1m. It's so straightforward since the bank considers it a risk free lending. With the new law, your 1m earns 59k after withholding tax. Your total interest expense will be 77k. Net int exp kes. 18k. At my bank, I simply sign a form they call charge on deposit, and within 24hrs, they have disbursed my loan. Okay, here is a "funny" thought. How about you just use your 1 million?? Your total gross/net interest expense will be zero, zip, nothing!!! And considering the former (future) interest regime, you must have been paying approx. 10% to borrow YOUR OWN MONEY!!! Why would one want to do that?? Kindly school me. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: New-farer Joined: 7/4/2016 Posts: 18
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MaichBlack wrote:FRM2011 wrote:mkeiy wrote:FRM2011 wrote:@bigchick, ur friend's predicament isn't that bad actually. Her facility is cash covered and the approval authority rests with her branch manager.
Tell her to engage them. At the very worst, she will "clear" the loan by depositing the outstanding balance and within minutes a new loan will be disbursed with the same security.
She has learnt her lessons and she will make a killing in the second attempt.
My branch manager can authorise a loan of up yo 10m within minutes if it's cash covered. @FRM2011, How does that work? If you have 1m in your bank account, and you want to invest 1m in a business, the way I do it is open a fixed deposit in the bank and use it as security to borrow 1m. It's so straightforward since the bank considers it a risk free lending. With the new law, your 1m earns 59k after withholding tax. Your total interest expense will be 77k. Net int exp kes. 18k. At my bank, I simply sign a form they call charge on deposit, and within 24hrs, they have disbursed my loan. Okay, here is a "funny" thought. How about you just use your 1 million?? Your total gross/net interest expense will be zero, zip, nothing!!! And considering the former (future) interest regime, you must have been paying approx. 10% to borrow YOUR OWN MONEY!!! Why would one want to do that?? Kindly school me. Taking sacco mentality to a bank.
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Rank: Elder Joined: 11/5/2010 Posts: 2,459
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MaichBlack wrote:FRM2011 wrote:mkeiy wrote:FRM2011 wrote:@bigchick, ur friend's predicament isn't that bad actually. Her facility is cash covered and the approval authority rests with her branch manager.
Tell her to engage them. At the very worst, she will "clear" the loan by depositing the outstanding balance and within minutes a new loan will be disbursed with the same security.
She has learnt her lessons and she will make a killing in the second attempt.
My branch manager can authorise a loan of up yo 10m within minutes if it's cash covered. @FRM2011, How does that work? If you have 1m in your bank account, and you want to invest 1m in a business, the way I do it is open a fixed deposit in the bank and use it as security to borrow 1m. It's so straightforward since the bank considers it a risk free lending. With the new law, your 1m earns 59k after withholding tax. Your total interest expense will be 77k. Net int exp kes. 18k. At my bank, I simply sign a form they call charge on deposit, and within 24hrs, they have disbursed my loan. Okay, here is a "funny" thought. How about you just use your 1 million?? Your total gross/net interest expense will be zero, zip, nothing!!! And considering the former (future) interest regime, you must have been paying approx. 10% to borrow YOUR OWN MONEY!!! Why would one want to do that?? Kindly school me. It's a Friday so I will keep it short. Am an accountant and this is how I look at it. I can withdraw my 1m and go buy stocks. That way there will be one asset on my balance sheet. My option leaves me with two assets( my 1m in the bank and stocks of 1 m financed by a liability of 1m. Note the Net worth remains the same. Plus I have noted am able to push myself to the limit with a loan obligation hanging over my neck. Now the above works for me. As one guy said in this forum, it doesn't have to be good, or right or popular, it just needs to work. I was advising @bigchick's friend because we seem to share same opinion here. @rfe_20354, pliz don't copy what I do. Stick to what works for you.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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FRM2011 wrote:MaichBlack wrote:FRM2011 wrote:mkeiy wrote:FRM2011 wrote:@bigchick, ur friend's predicament isn't that bad actually. Her facility is cash covered and the approval authority rests with her branch manager.
Tell her to engage them. At the very worst, she will "clear" the loan by depositing the outstanding balance and within minutes a new loan will be disbursed with the same security.
She has learnt her lessons and she will make a killing in the second attempt.
My branch manager can authorise a loan of up yo 10m within minutes if it's cash covered. @FRM2011, How does that work? If you have 1m in your bank account, and you want to invest 1m in a business, the way I do it is open a fixed deposit in the bank and use it as security to borrow 1m. It's so straightforward since the bank considers it a risk free lending. With the new law, your 1m earns 59k after withholding tax. Your total interest expense will be 77k. Net int exp kes. 18k. At my bank, I simply sign a form they call charge on deposit, and within 24hrs, they have disbursed my loan. Okay, here is a "funny" thought. How about you just use your 1 million?? Your total gross/net interest expense will be zero, zip, nothing!!! And considering the former (future) interest regime, you must have been paying approx. 10% to borrow YOUR OWN MONEY!!! Why would one want to do that?? Kindly school me. It's a Friday so I will keep it short. Am an accountant and this is how I look at it. I can withdraw my 1m and go buy stocks. That way there will be one asset on my balance sheet. My option leaves me with two assets( my 1m in the bank and stocks of 1 m financed by a liability of 1m. Note the Net worth remains the same. Plus I have noted am able to push myself to the limit with a loan obligation hanging over my neck. Now the above works for me. As one guy said in this forum, it doesn't have to be good, or right or popular, it just needs to work. I was advising @bigchick's friend because we seem to share same opinion here. @rfe_20354, pliz don't copy what I do. Stick to what works for you. I wouldn't hire you as my accountant no no no Life is short. Live passionately.
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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telephone farming from Naibuore, eish wacha tu....  In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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Angelica _ann wrote:telephone farming from Naibuore, eish wacha tu.... Details?
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Rank: Elder Joined: 2/8/2013 Posts: 4,068 Location: At Large.
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MaichBlack wrote:FRM2011 wrote:mkeiy wrote:FRM2011 wrote:@bigchick, ur friend's predicament isn't that bad actually. Her facility is cash covered and the approval authority rests with her branch manager.
Tell her to engage them. At the very worst, she will "clear" the loan by depositing the outstanding balance and within minutes a new loan will be disbursed with the same security.
She has learnt her lessons and she will make a killing in the second attempt.
My branch manager can authorise a loan of up yo 10m within minutes if it's cash covered. @FRM2011, How does that work? If you have 1m in your bank account, and you want to invest 1m in a business, the way I do it is open a fixed deposit in the bank and use it as security to borrow 1m. It's so straightforward since the bank considers it a risk free lending. With the new law, your 1m earns 59k after withholding tax. Your total interest expense will be 77k. Net int exp kes. 18k. At my bank, I simply sign a form they call charge on deposit, and within 24hrs, they have disbursed my loan. Okay, here is a "funny" thought. How about you just use your 1 million?? Your total gross/net interest expense will be zero, zip, nothing!!! And considering the former (future) interest regime, you must have been paying approx. 10% to borrow YOUR OWN MONEY!!! Why would one want to do that?? Kindly school me. First let me clarify that the max spread when borrowing ones own funds is 6% for the greediest bank otherwise 4 to 5 % is the norm. Second let me say its a widely used method where you have a cash backed facility.This helps one to lower their tax obligation legally(loans are tax allowable expenses).It also helps one to be disciplined in paying the loan and it also keeps the cost of credit low.Instead of buying kaplot of 1M and then charging it(valuation and charging fees) then getting 60%(LTV) you secure your credit with cash. Its also used by the Ben Gethis of this world who place FDs and quickly borrow against the same so when the Alai's of this world question there source of money for big projects they can quickly show their loan statements from bank xxx. Love is beautiful and so are those who share it.With Love, Marriage is an amazing event in ones life time, the foundation of joy, happiness and success.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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[quote=Bigchick
Second let me say its a widely used method where you have a cash backed facility.This helps one to lower their tax obligation legally(loans are tax allowable expenses).
[/quote]
Is this applicable across the board,ie individuals and companies?
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Rank: Elder Joined: 2/8/2013 Posts: 4,068 Location: At Large.
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Chaka wrote:[quote=Bigchick
Second let me say its a widely used method where you have a cash backed facility.This helps one to lower their tax obligation legally(loans are tax allowable expenses).
Is this applicable across the board,ie individuals and companies?[/quote] Yes its applicable to all. Love is beautiful and so are those who share it.With Love, Marriage is an amazing event in ones life time, the foundation of joy, happiness and success.
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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Bigchick wrote:Chaka wrote:Bigchick
wrote:
Second let me say its a widely used method where you have a cash backed facility.This helps one to lower their tax obligation legally(loans are tax allowable expenses).
Is this applicable across the board,ie individuals and companies? Yes its applicable to all. Individuals??? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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sparkly wrote:FRM2011 wrote:MaichBlack wrote:FRM2011 wrote:mkeiy wrote:FRM2011 wrote:@bigchick, ur friend's predicament isn't that bad actually. Her facility is cash covered and the approval authority rests with her branch manager.
Tell her to engage them. At the very worst, she will "clear" the loan by depositing the outstanding balance and within minutes a new loan will be disbursed with the same security.
She has learnt her lessons and she will make a killing in the second attempt.
My branch manager can authorise a loan of up yo 10m within minutes if it's cash covered. @FRM2011, How does that work? If you have 1m in your bank account, and you want to invest 1m in a business, the way I do it is open a fixed deposit in the bank and use it as security to borrow 1m. It's so straightforward since the bank considers it a risk free lending. With the new law, your 1m earns 59k after withholding tax. Your total interest expense will be 77k. Net int exp kes. 18k. At my bank, I simply sign a form they call charge on deposit, and within 24hrs, they have disbursed my loan. Okay, here is a "funny" thought. How about you just use your 1 million?? Your total gross/net interest expense will be zero, zip, nothing!!! And considering the former (future) interest regime, you must have been paying approx. 10% to borrow YOUR OWN MONEY!!! Why would one want to do that?? Kindly school me. It's a Friday so I will keep it short. Am an accountant and this is how I look at it. I can withdraw my 1m and go buy stocks. That way there will be one asset on my balance sheet. My option leaves me with two assets( my 1m in the bank and stocks of 1 m financed by a liability of 1m. Note the Net worth remains the same. Plus I have noted am able to push myself to the limit with a loan obligation hanging over my neck. Now the above works for me. As one guy said in this forum, it doesn't have to be good, or right or popular, it just needs to work. I was advising @bigchick's friend because we seem to share same opinion here. @rfe_20354, pliz don't copy what I do. Stick to what works for you. I wouldn't hire you as my accountant no no no Hata usipomchukua as your accountant kuna yule atamkufia na atamwajiri! John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Elder Joined: 2/8/2013 Posts: 4,068 Location: At Large.
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MaichBlack wrote:Bigchick wrote:Chaka wrote:Bigchick
wrote:
Second let me say its a widely used method where you have a cash backed facility.This helps one to lower their tax obligation legally(loans are tax allowable expenses).
Is this applicable across the board,ie individuals and companies? Yes its applicable to all. Individuals??? The borrowing that is. Not the tax bit. Love is beautiful and so are those who share it.With Love, Marriage is an amazing event in ones life time, the foundation of joy, happiness and success.
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Bigchick wrote:MaichBlack wrote:Bigchick wrote:Chaka wrote:Bigchick
wrote:
Second let me say its a widely used method where you have a cash backed facility.This helps one to lower their tax obligation legally(loans are tax allowable expenses).
Is this applicable across the board,ie individuals and companies? Yes its applicable to all. Individuals??? The borrowing that is. Not the tax bit. Please expound. Life is short. Live passionately.
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Rank: Elder Joined: 11/5/2010 Posts: 2,459
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@bigchick, I can tell this is your territory. My advice, most people in this column are payslip guys.
Nothing wrong with that but trying to explain some jua kali survival tips to such guys is akin to explaining marriage intricacies to that loud-mouthed nation columnist called njoki chege. A painfully useless endeavour.
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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FRM2011 wrote:@bigchick, I can tell this is your territory. My advice, most people in this column are payslip guys.
Nothing wrong with that but trying to explain some jua kali survival tips to such guys is akin to explaining marriage intricacies to that loud-mouthed nation columnist called njoki chege. A painfully useless endeavour.  John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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FRM2011 wrote:@bigchick, I can tell this is your territory. My advice, most people in this column are payslip guys.
Nothing wrong with that but trying to explain some jua kali survival tips to such guys is akin to explaining marriage intricacies to that loud-mouthed nation columnist called njoki chege. A painfully useless endeavour. You speak like you are the only one who went to school. Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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FRM2011 wrote:@bigchick, I can tell this is your territory. My advice, most people in this column are payslip guys.
Nothing wrong with that but trying to explain some jua kali survival tips to such guys is akin to explaining marriage intricacies to that loud-mouthed nation columnist called njoki chege. A painfully useless endeavour. You speak like you are the only one who went to school or you are the only one with an IQ greater than 90. Life is short. Live passionately.
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Rank: Elder Joined: 2/8/2013 Posts: 4,068 Location: At Large.
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FRM2011 wrote:@bigchick, I can tell this is your territory. My advice, most people in this column are payslip guys.
Nothing wrong with that but trying to explain some jua kali survival tips to such guys is akin to explaining marriage intricacies to that loud-mouthed nation columnist called njoki chege. A painfully useless endeavour. Thanks @ FRM2011. I was in the process of making a simple P&L Statement to show where Loan Repayment appears as an expense...... With your advise I can now refer the payslip guys to their finance office. Love is beautiful and so are those who share it.With Love, Marriage is an amazing event in ones life time, the foundation of joy, happiness and success.
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