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Refinance/ restructure asset financing

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anasazi		#1 Posted : Monday, March 13, 2017 5:26:29 PM
Rank: Veteran Joined: 6/8/2007 Posts: 675		Hi Wazuans, We have a situation whereby we need to refinance/ restructure an asset loan we have, so that we pay less per month. We took the original asset finance loan (for a truck) at Faulu, and now they say they can't restructure it! Is that true? I thought all loans can be restructured if all documents are in order? If it can't work with Faulu, could we probably have another institution pay off the loan and give us another loan at a better monthly repayment rate? What do the wazees advise? Form is temporary, class is permanent
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FRM2011		#2 Posted : Monday, March 13, 2017 7:20:33 PM
Rank: Elder Joined: 11/5/2010 Posts: 2,459		anasazi wrote: Hi Wazuans, We have a situation whereby we need to refinance/ restructure an asset loan we have, so that we pay less per month. We took the original asset finance loan (for a truck) at Faulu, and now they say they can't restructure it! Is that true? I thought all loans can be restructured if all documents are in order? If it can't work with Faulu, could we probably have another institution pay off the loan and give us another loan at a better monthly repayment rate? What do the wazees advise? From experience, most banks are hesitant to go the restructuring route. Ever since that stupid law on capping, asset finance has been the most difficult thing to get. If you know a motor vehicle dealer, talk to them. They keep a tab on which bank has lending appetite. About three months ago, it was only coop, stanbic, NIC and KCB that were willing to touch asset finance. At equity it was a NO NO !!!
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anasazi		#3 Posted : Monday, March 13, 2017 8:33:29 PM
Rank: Veteran Joined: 6/8/2007 Posts: 675		Oh wow, I thought asset financing was a no brainer since the asset itself is security! Form is temporary, class is permanent
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kaka2za		#4 Posted : Tuesday, March 14, 2017 4:04:17 AM
Rank: Elder Joined: 10/3/2008 Posts: 4,058 Location: Gwitu		anasazi wrote: Oh wow, I thought asset financing was a no brainer since the asset itself is security! That's why it is risky! Truth forever on the scaffold Wrong forever on the throne (James Russell Rowell)
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Flo-ology		#5 Posted : Tuesday, March 14, 2017 8:21:54 AM
Rank: Member Joined: 12/17/2016 Posts: 225		Why would a loan secured by an asset be risky??? Reflection Eternal
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kaka2za		#6 Posted : Tuesday, March 14, 2017 9:30:24 AM
Rank: Elder Joined: 10/3/2008 Posts: 4,058 Location: Gwitu		Flo-ology wrote: Why would a loan secured by an asset be risky??? The borrower contribution is usually small or sometimes even nil. The asset can be stripped off or misused such that it would be of low value upon repossession. Truth forever on the scaffold Wrong forever on the throne (James Russell Rowell)
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Lolest!		#7 Posted : Tuesday, March 14, 2017 9:54:17 AM
Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma		kaka2za wrote: Flo-ology wrote: Why would a loan secured by an asset be risky??? The borrower contribution is usually small or sometimes even nil. The asset can be stripped off or misused such that it would be of low value upon repossession. what about land? Banks wont even give me a lower rate when they charge my land And I'm talking about pre-Njomo Act days
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kaka2za		#8 Posted : Tuesday, March 14, 2017 10:06:55 AM
Rank: Elder Joined: 10/3/2008 Posts: 4,058 Location: Gwitu		Lolest! wrote: kaka2za wrote: Flo-ology wrote: Why would a loan secured by an asset be risky??? The borrower contribution is usually small or sometimes even nil. The asset can be stripped off or misused such that it would be of low value upon repossession. what about land? Banks wont even give me a lower rate when they charge my land And I'm talking about pre-Njomo Act days Security/collateral is not the major consideration. Capacity to pay is the main thing. Banks will give you money when you prove you don't need it which is actually confirmation of ability to pay. Truth forever on the scaffold Wrong forever on the throne (James Russell Rowell)
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quicksand		#9 Posted : Tuesday, March 14, 2017 10:33:12 AM
Rank: Veteran Joined: 7/5/2010 Posts: 2,061 Location: Nairobi		Lolest! wrote: kaka2za wrote: Flo-ology wrote: Why would a loan secured by an asset be risky??? The borrower contribution is usually small or sometimes even nil. The asset can be stripped off or misused such that it would be of low value upon repossession. what about land? Banks wont even give me a lower rate when they charge my land And I'm talking about pre-Njomo Act days This. I had eyed an asset in a nice area and wanted financing...everything was in order, the title would be held by the bank till the loan was concluded, proven earnings and track record of repayment, no foreseeable problems in a future, quick disposal of the asset. Bank asked for 18%. I had thought with my fundamentals and attributes of the asset I could get a lower rate (say a 12%), pay it off at an accelerated pace, everyone makes their piece and is left at an advantage. But no, I had deluded myself. The bank wouldn't budge below 18...even when all the convoluted talk of risk didn't make any sense, for my particular case anyway. The greed is rapacious, always has been. It is not just about making profit, banks aren't happy until they have f*ed you in the ** good and proper such that you can pass a fully grown melon - forgive my french. And those who say the Njomo Act has thrown the economy off kilter are perhaps right, I have the common sense to at least concede that point....but personally, they do nothing for me ...it is good that I am not the governor cause with my large chip I would raze the entire edifice to the ground. So let the Njomo Act squeeze things until everything goes up in a fireball, or we all adapt and learn to do things differently. I have nothing to lose.
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anasazi		#10 Posted : Tuesday, March 14, 2017 11:09:27 AM
Rank: Veteran Joined: 6/8/2007 Posts: 675		kaka2za wrote: Lolest! wrote: kaka2za wrote: Flo-ology wrote: Why would a loan secured by an asset be risky??? The borrower contribution is usually small or sometimes even nil. The asset can be stripped off or misused such that it would be of low value upon repossession. what about land? Banks wont even give me a lower rate when they charge my land And I'm talking about pre-Njomo Act days Security/collateral is not the major consideration. Capacity to pay is the main thing. Banks will give you money when you prove you don't need it which is actually confirmation of ability to pay. Quite eye opening. I also have this sneaky feeling that the bank's people would gain from defaulting on the loan, so that when they repossess and auction at a low price, they and their contacts can gain. Form is temporary, class is permanent
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