Regardless of nature and size, every business needs a regular influx of cash for various reasons. Whether it is for purchasing new machinery, funding a huge project, stocking inventory or simply investing in a new commercial venture, immediately arranging a significant amount of money remains a constant struggle for every business owner.
Loan Against Commercial Property Can Support Different Business Aspects
However, nowadays, you only require an idle commercial property to smoothly sail through such situations. As there are numerous financial institutions that provide a well-planned loan against commercial property to assist you in quickly raising a large sum of money.
Loan Against Commercial Property
This is a secured loan as the property offered by you is kept as a security by the lender, and this value of the property determines the total amount of the loan you can get. Additionally, it is important to note that here the transfer of only interest takes place as the legal rights of ownership completely remain with the borrower.
But in case, the borrower fails to make the payments, the lender has the complete authority to claim the property in order to recover the losses. In fact, if you are still not sure about how a loan against property (LAP) can support the growth of your business, listed below are a few factors that make LAP an ideal business companion.
Take smart business decision –
Leveraging a property allows you to plan for future business prospects in the most stress-free manner as it provides a long tenor. For instance, the markets are flooded with several lenders who provide a flexible repayment period that can stretch as long as 20 years. This way, you get an ample amount of time to make the repayments as well as to develop effective and innovative business plans for which the money can be utilized.
Get access to a large sum of money –
Since you offer a valuable asset in the form of collateral or security, the lenders sanction almost 60-90% of the property’s market value which in turn allows you to access a huge amount of money. This much money is essential for any impactful business move and can basically make it absolutely convenient for you to execute your dream projects. For example, if you are a doctor then you can use the raised funds to expand the clinic, buy high-end machinery or purchase a new clinic altogether.
Enjoy minimal borrowing cost –
One of the major reasons to take a loan against commercial property is that as it is a secured loan backed by an expensive asset, the lenders offer you the loan at a low rate of interest. In other words, you can repay the entire loan amount in the form of EMIs without experiencing any financial struggle as the low-interest rate results in a low EMI amount. In addition, if you have a positive credit history then you can get the lowest interest rate possible.
Ensure sufficient working capital at all times –
The major element behind every successful business is having sufficient working capital as it is the money required to run the everyday business operations. However, due to late payments and other unforeseen circumstances, you may encounter a working capital deficit. To deal with such situations, you can completely rely on LAP and raise the required amount of funds by offering a commercial property.
Grab some of the best opportunities –
The entire loan application to sanction process is absolutely quick and hassle-free which means that you can gain access to the needed funds in the shortest time possible and immediately utilize them to grab some of the best growth opportunities.
Are you eligible for taking a loan against any commercial property?
- Age – For the salaried individuals, the age limit is between 25 and 60 years, whereas, for self-employed applicants, the age bar is between 25 and 70 years.
- Residential proof – The applicant must be residing in the same house for at least 1 year to reflect residential stability.
- CIBIL score – The personal CIBIL score of the borrower should be 750 or above, and no commercial CIBIL score is required.
- The minimum monthly income of the salaried individuals should be Rs. 24,000.
The list of documents needed for loan approval
- Residential proof, income proof and KYC documents.
- All the relevant documents related to your commercial property such as electricity bill, sales deed and other property documents.
- Photo ID like Aadhar card, driving license, PAN, voter ID and passport-sized photographs.
- Income proof for salaried individuals – salary slips of last three months, employment certificate and appointment letter.
- Income proof for self-employed individuals – Income tax return proof and registration certificate
Conclusion | Loan Against Commercial Property
If you require funds for any matter related to your business then taking a loan against commercial property might be just the best possible option for you. From offering a large sum of money at a low-interest rate to helping you grab some of the incredible growth opportunities, it can deliver a range of benefits. All you have to do is follow all the points mentioned above to meet the eligibility criteria.
