Loan Against Property (LAP) for Business
Unlock the Value of Your Property to Fuel Business Growth
At Capikone Consulting Private Limited, we offer expert guidance on Loan Against Property (LAP) services tailored to meet the financial needs of businesses in Ahmedabad and Gandhinagar. Leverage the value of your commercial or residential property to secure substantial funds for your business operations, expansion, or any other financial requirement.
Detailed Description
A Loan Against Property (LAP) is a secured loan where businesses can mortgage their commercial or residential property to obtain a significant amount of funding. This type of loan is ideal for meeting various business needs such as working capital, expansion plans, equipment purchase, or managing operational costs.
Features
- High Loan Amount: Secure up to 60-65% of the property’s market value.
- Flexible Repayment Options: Choose between EMI-based term loans or overdraft facilities to manage repayments as per your cash flow.
- Attractive Interest Rates: Competitive interest rates starting from 9.00% depending on the loan type and repayment method.
- Long Tenure: Extended loan tenure of up to 15 years to ease repayment burdens.
- Multi-purpose Use: Funds can be utilized for various business purposes including expansion, inventory purchase, and working capital management.
Eligibility Criteria
For Business Owners
- Business Vintage: Minimum of 3 years in operation with stable revenue.
- Creditworthiness: Good credit history and financial stability.
- Property Ownership: Clear title of the property to be mortgaged.
- Financial Documentation: Demonstrable financial performance through balance sheets, profit & loss statements, and bank statements.
Interest Rates & Charges
- Interest Rates: Typically ranges starting from 9.00% varying based on the loan product and borrower profile.
- Processing Fee: Up to 1% of the loan amount, with a minimum of Rs. 7,500.
- Prepayment Charges:As per the terms and conditions of the bank.
- Foreclosure Charges: Up to 4% of the principal outstanding within the first 12 months; nil thereafter.
Required Documentation
For Business Entities
- Identity Proof: PAN card of the company and the directors/partners.
- Address Proof: Utility bills, lease agreements, or property tax receipts.
- Financial Statements: Audited financials for the last 3 years.
- Bank Statements: Last 12 months’ bank statements to verify cash flows.
- Property Documents: Title deed, valuation report, and encumbrance certificate.
Flexible Financing Options
- Fund-Based Facilities:
- Cash Credit: Provides flexible short-term funding for working capital needs.
- Overdraft Against Property: Withdraw funds as per need up to an approved limit.
- Term Loans: Fixed tenure loans with structured EMIs.
- Export Packing Credit & Pre-shipment Finance: Supports export businesses in financing production and shipment.
- Bill Discounting: Converts your receivables into immediate cash.
- Non-Fund Based Facilities:
- Letter of Credit: Ensures payment to suppliers in international trade.
- Bank Guarantee: Acts as a financial backstop for business obligations.
Benefits of a Loan Against Property for Business
- High Loan Amounts: Access to substantial funds without selling your property.
- Lower Interest Rates: Secured loans generally attract lower interest rates compared to unsecured loans.
- Flexible Use: Funds can be used for multiple business purposes.
- Longer Tenure: Extended repayment period reduces the monthly repayment burden.
- Retain Ownership: Retain ownership of your property while leveraging its value.
FAQs
Can I use the loan against property for multiple business purposes?
Yes, the funds can be used for various business needs, including working capital, expansion, inventory purchase, and more.
What types of properties are eligible for LAP?
Both residential and commercial properties are eligible, provided they have a clear title and are free of encumbrances.
Is prepayment allowed for LAP?
Yes, prepayment is allowed. Subject to terms and conditions of the bank or FIs.
How is the loan amount determined?
The loan amount is typically up to 60-65% of the property’s current market value.
What is the typical interest rate for LAP?
Interest rates usually range starting from 9.00% depending on the loan type and borrower’s profile.