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Reasons to fund your new business with a Loan Against Property
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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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There is no greater feeling than finally taking off with your business plan. While you have the talent and knowledge to make a successful business person, low finances can be a major hurdle. It is important to have the right source to finance your business. Fortunately, you can now fund your dreams through a variety of loan options, and Loan against property is a great pick.
Financing your business through a loan against property makes for a good option. Here are some reasons why it is a suitable choice:
Lower interest rates – A loan against property is a secured form of credit. The property acts as the collateral to offer the lender security. Thus, this loan is offered at a much lower interest rate as compared with other kinds of loans. However, this factor is strongly driven by the amount that you wish to loan and the financial institution you pick for your loan against property.
Use any property as collateral – A very good benefit that a loan against property carries is that it can be availed using any type of property. This includes residential, commercial, as well as industrial property. It does not matter what kind of property you own as you can seek a loan with your shop, bungalow, office and even land.
Higher loan amount – When starting your new business, you do require a big fund bank. As compared with other lending options, loan against property gets you a higher loan amount. It can range anywhere from INR 10 lakhs to INR 5 crores depending upon the total value of your property. Getting a bigger loan amount can ease out the process of starting-off your business venture.
Longer repayment tenure – Running a business can take immense effort and time. Additionally, it also takes a while before you begin generating profit revenue. Loan against property leaves you with enough time to repay your debt. It comes with a tenure as long as 15 years, unlike other types of loans. Thus, the longer term period will leave you with enough time to manage your funds while your business is in its initial stage.
Presenting the accurate essential documentation and meeting the eligibility criteria will ensure a quick loan disbursal. To further smoothen the process, you should also generate a blue print of your business model and revenue generation plans.
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