Company Home Loan Requirements in South Africa
TL;DR: For a new company buying property with a bond, banks generally ask for five things: the company's registration certificate (CoR14.3), its Memorandum of Incorporation, a directors' resolution approving the purchase and loan, FICA documents for directors and shareholders, and the director's own financials, because the director signs surety. Three years of company financials is not on the list.
Okay, so: five documents. That's what generally stands between a brand-new company and its first property loan.
Get them ready before you find the deal, and the deal never waits on paperwork. When I bought my first property in a company, it went through on a 100% bond, and the document pack did a lot of the heavy lifting. Everything in order, down to an attorney-certified copy of my ID. Not glamorous. It works.
What documents does a company need to apply for a bond?
Requirements differ between banks, but a new company's application generally includes:
1. The registration certificate (CoR14.3). Issued by CIPC when the company is registered. It shows the company's name, registration number and date of incorporation.
2. The Memorandum of Incorporation (MOI). The company's rulebook: who the directors are, what they can decide, and any restrictions on borrowing or buying property.
3. A directors' resolution. A signed decision by the directors approving the purchase of the property and the bond, and authorising a specific director to sign.
4. FICA documents. Under the Financial Intelligence Centre Act, the bank must verify who it's dealing with: ID and proof of address for directors and shareholders, plus the company's details. Get your ID certified properly. A blurry cellphone photo of your ID book won't cut it.
5. Your own financials. Payslips or income proof, bank statements and your credit profile, because you'll sign surety for the company's loan.
Ja, but what about three years of financials?
It's not on the list.
That requirement applies when an established business borrows on the strength of its own trading history. A new property company has no history, so the bank looks through the company to you, the director standing behind it.
This is the one that stops people. They hear "company" and think they need three years of audited books before a bank will talk to them. Nope.
The Directors Fortress walks you through documents 1 and 2, registering the right entity properly. R99 once off. Start here
Why does the MOI matter?
The standard MOI works for many companies. But if you have business partners, plan a joint venture, or want specific rules on who can sign for what, the default may not cover it. A bank or conveyancer may also check that the MOI doesn't restrict the purchase.
What else helps a company application?
A clean deal summary. Price, rent, costs and why the deal works. A short investor pack does the banker's job for them.
A company bank account in the company's name.
An originator who knows entities. Presenting a company application properly is a skill, and a good originator speaks the bank's language.
The catches
Banks differ. One bank may ask for extra documents. Always confirm the list with your originator before you apply.
Timing. Register the company before you sign the offer. Changing the buyer after signing can mean a second transfer, and that's a kak way to spend money twice.
Keep it current. A company that stops filing annual returns can be deregistered, which is a serious problem if it owns property.
Where the company fits
Most of these documents exist only once the company is registered. That's why the company comes first: register it, get the MOI right, and keep a resolution template ready. Then when the deal appears, you're the buyer who can move that day.
FAQ
Does a new company need financial statements to get a home loan?
Not usually. For a new company, banks generally assess the deal and the director, who signs surety, rather than company trading history.
What is a CoR14.3?
It's the registration certificate CIPC issues when a company is registered. It confirms the company's name, number and registration date.
What is a directors' resolution for a property purchase?
A signed decision by the company's directors approving the purchase and the bond, and authorising someone to sign on the company's behalf.
Who needs to provide FICA documents?
Generally the directors and shareholders, plus the company itself. The bank will tell you exactly what it needs.
Related reading
Get documents 1 and 2 right
The Directors Fortress gives you the blueprint for registering the entity properly, the investor-friendly offer to purchase and a walkthrough of my setup. R99 once off.
Education only. This article is general information, not tax, legal or financial advice. Speak to a registered tax practitioner, attorney or financial adviser about your own situation.
Sources
CIPC: cipc.co.za
Financial Intelligence Centre: fic.gov.za
Companies Act 71 of 2008: gov.za
About the author
Michael Bowen co-founded ZAHomes. He bought his first property in 2003 on the outskirts of Amsterdam, with a 100% mortgage, at the wrong point in the cycle, and lost over €14,000 on it while sanding the floors himself in a heatwave. Twenty-odd years, 40-odd countries and a lot of property school fees later, he lives in Cape Town and teaches South Africans to buy and hold property inside a company. His view hasn't changed: an investor's greatest assets are the lessons from their failed deals.
