Business Loan Proposal

Executive Summary

Jeycoi Real Estate seeks a KSh2,000,000 working-capital loan over 60 months to purchase construction materials and fund labour costs. Operating for two years in Kenya's active commercial real estate sector, the company has demonstrated market engagement with annual revenue of KSh2,500,000. The requested facility will enable the completion of current projects and support pipeline expansion. The loan is collateralised by a 1-acre plot valued at KSh3,000,000, delivering a prudent loan-to-value (LTV) ratio of 66.7%. Repayment will be serviced through monthly income from ongoing real estate activity. This proposal is structured under the Imali Commercial Business Loan product (7.0–12.0% p.a., KSh25,000–KSh2,000,000, 6–60 months).

Company Overview

• Registered name: Jeycoi Real Estate
• Sector: Commercial real estate
• Operating since: 2 years
• Annual revenue: KSh2,500,000
• Primary contact: Koi (jeycoi@yahoo.com)

Jeycoi Real Estate operates within Kenya's dynamic construction and property sector, managing development projects and serving both retail and institutional clients. With two years of operational history, the company has built a track record in the delivery of real estate solutions. The requested capital injection will strengthen project execution capacity and reduce reliance on deferred supplier credit.

Industry & Market Context

Kenya's real estate and construction sector is characterised by:

• Strong urbanisation drivers, particularly in Nairobi and satellite counties.
• Persistent demand for residential, commercial and mixed-use developments.
• Working-capital intensity: developers carry construction materials and labour costs while awaiting staged project payments or sales completion.
• Seasonal fluctuations tied to regulatory cycles (county permits, National Construction Authority approvals) and weather constraints on site activity.

Real estate firms often require bridge financing to smooth inventory conversion and project timelines. Access to affordable credit enhances competitiveness and delivery velocity.

Loan Request

Use of Funds

Proceeds will be allocated to:

1. Construction materials – cement, steel reinforcement, timber, roofing, finishing materials.
2. Labour costs – skilled trades, site supervision, subcontractor fees.

This deployment supports inventory turnover and project-completion timelines, enabling Jeycoi Real Estate to fulfil contracts and generate revenue for loan servicing.

Financial Position

• Annual revenue: KSh2,500,000
• Monthly revenue (average): ~KSh208,333
• Debt-to-revenue ratio (post-loan): 80% (moderate, typical for early-stage real estate developers)

With two years in operation, the company has demonstrated revenue generation. Detailed financials (profit-and-loss statement, bank statements) should be reviewed to confirm cash flow adequacy and seasonality patterns.

Repayment Strategy

• Structure: Equal monthly instalments over 60 months.
• Source: Monthly income from real estate sales and project payments.
• Monthly obligation (principal + interest): Approximately KSh38,000–KSh43,000 (depending on final rate).
• Coverage: At average monthly revenue of KSh208,333, the debt-service coverage ratio exceeds 4.8×, providing healthy headroom.

The applicant's proposed repayment schedule aligns with monthly revenue cycles. Enhanced visibility via transaction history (M-Pesa and bank statements) will confirm consistency.

Risk Assessment & Mitigation

Risks:

• Revenue volatility: Real estate income is inherently lumpy; project delays or client payment deferrals may strain liquidity.
• Sector cyclicality: Regulatory delays, permit bottlenecks, or economic downturns can compress deal flow.
• Thin operating history: Two years limits assessment of resilience across business cycles.

Mitigation:

• Strong collateral coverage: LTV of 66.7% provides a material buffer.
• Personal guarantee: Director-level guarantee binds principals to repayment obligations.
• Phased disbursement: Tranche release tied to verified material purchase receipts reduces diversion risk.
• Regular monitoring: Quarterly financial reviews and progress reporting.

Collateral & Guarantees

Primary security:

• 1-acre plot (real estate / property)
  • Ownership: Sole ownership
  • Estimated value: KSh3,000,000
  • Encumbrance: Unspecified; to be confirmed via Land Registry search
  • Loan-to-value: 66.7% (conservative, well-collateralised)

Additional security:

• Personal guarantee from principal(s) (recommended).

Land valuation, title verification, and registration of charge at the Ministry of Lands are required pre-disbursement.

Regulatory & Banking Framework

Regulator:
Central Bank of Kenya (CBK) supervises commercial lending, sets the Central Bank Rate (CBR), and enforces Basel III capital-adequacy standards for banks.

Payment rails:
Disbursement and repayment may be executed via PesaLink (interbank instant transfers), M-Pesa (mobile money), or KEPSS RTGS (large-value settlement).

Required documentation:

• Business Registration Service (BRS) certificate
• KRA PIN and Tax Compliance Certificate
• Directors' national IDs / passports
• eCitizen business search extract
• Title deed (for collateral land) and official valuation report

Guarantee schemes:
The Kenya Credit Guarantee Scheme (CGS) may provide partial risk coverage for qualifying SME loans, enhancing lender risk appetite.

Compliance:
The facility will be processed in accordance with the Proceeds of Crime and Anti-Money Laundering Act, Data Protection Act 2019, and CBK Prudential Guidelines.

Conclusion

Jeycoi Real Estate presents a credible case for a KSh2,000,000 working-capital facility. The company operates in a growth sector with clear capital needs, offers robust collateral coverage (66.7% LTV), and projects a strong debt-service coverage ratio. With proper documentation, collateral perfection, and phased disbursement controls, this transaction offers balanced risk-return. Approval is recommended, subject to:

1. Verification of title and formal valuation of the 1-acre plot.
2. Review of 12 months' bank and M-Pesa statements.
3. Execution of personal guarantee and loan security documents.
4. Confirmation of tax compliance and BRS registration currency.

Prepared by: Imali Commercial Credit
Contact: jeycoi@yahoo.com (Koi, Jeycoi Real Estate)