BUYING A BUSINESS WITH A HOMELOAN: IS AFFORDABILITY MEASURED WITH REFERENCE TO BORROWER’S INCOME OR TO THE BUSINESS’ ESTIMATED PROFITS?
Wiese and Another v Absa Bank Limited (14580/2013) [2017] ZAWCHC 12
(24 February 2017)
May a bank refer to the projected income of a separate commercial entity when assessing affordability of a personal loan for a consumer, in circumstances where the loan to be advanced to the customer is for the specific purpose of purchasing that commercial entity? The consumer here argued that the bank knew that his salary was insufficient to cover the instalments under the homeloan whilst the bank maintained that the estimated income of the franchise that the borrower intended to acquire with the loan, would be adequate to enable him to repay the loan.
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The Judgment
Summary of the Judgment
STBB’S STSMA REFERENCE GUIDE
In this, the fifteenth set of notes for your STSMA Reference Guide, section 16 of the Act is discussed.
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Section 16 of the Act – Appointment of Administrators
(N.B. Print in landscape)