While some might say that the sensible option would be to wait until you’ve saved enough to buy the horse of your dreams, there are impracticalities to this approach. If, for instance, you are a competitive rider hoping to ride at high levels, it’s likely that the right horse for you could come with a significant price tag. How long would the average equestrian wait to purchase the perfect horse? And as we all know, the right horse might arrive sooner than expected.
It was this reasoning that guided the decision of the team at Galaxy Financial Advisors (GFA) Holdings to create a financial product tailored for the equestrian market. Established in 1999, the company specialises in wealth management, retirement planning, estate planning and insurance. The finance division was launched in July 2015 as the first company in South Africa to provide finance for the purchasing of a sport horse.
HQ spoke to Sannelie Gallichan, who explained that the product is the brainchild of GFA owner, Jacques Cronje, whose daughter is a successful showjumper. “Through his daughter, Jacques met a number of riders who did not have funds available to purchase a horse. They did, however, have the means to pay off a loan, but at that point, no finance was available,” she tells us.
Their solution is a product which can best be described as a personal loan, structured over 36, 48 or 60 months, with insurance added as standard. The amount may be used to finance the full cost of the horse, however, Sannelie explains that in many cases it’s effective as a ‘top-up’ to help buyers acquire a more suitable horse. For those riders who need just that little bit extra to help them take the step from the ‘good’ horse to the ‘excellent’ horse, this comes as a welcome boost.
Loans can also be used for accessories such as tack and horseboxes. Invariably with a new horse comes a string of additional expenses for high-value items such as saddles, bridles and other equipment. For buyers with dreams of finding their perfect horse in the international market, finance may be used to facilitate the process, perhaps by covering the cost of import, for example.
Conditions of the loan
“Anyone who has the monthly cash flow to service the loan, but not the overall amount to purchase the horse, can apply for finance,” says Sannelie. “We are focusing on showjumping and dressage horses at the moment. As time goes by we will consider financing horses for other areas of the industry.”
GFA requires the horse to undergo a veterinary check. The company also stresses the necessity for excellent horse care. Annual vet checks are required and the lenders may also request random inspections until the loan has been repaid in full.
Equestrian finance is not a new concept worldwide and products of this nature could prove to be of benefit to the South African equestrian industry. As breeders find new markets for their horses, we may begin to see more investment into breeding programmes. There’s also potential for more riders to achieve their competitive goals, uplifting levels in the sporting sphere.
South Africa has become recognised as a nation of ‘borrowers’ and horse folk are often led by their hearts. But with the assistance of wealth managers – and this is where GFA has its roots – this can be managed; buyers may even find themselves learning a thing or two about financial planning.
Right for you?
Remember that finance isn’t always the solution for everyone. Before taking the step, consider your situation objectively:
- Do you truly need a more expensive horse?
- Will your budget cover the cost of a loan repayment in addition to stabling, lessons, health and veterinary care?
- Could you recover financially if you had to face the loss of your horse?
- Will this decision put pressure on your household?
- Are your other financial requirements being effectively managed?
Text: Charlotte Bastiaanse
The full article appears in the September issue of HQ.