Loan Against Securities
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Loan Against Securities for Business
A Loan Against Securities (LAS) allows businesses to leverage their investments in shares, mutual funds, and other securities to obtain a loan without having to liquidate their assets. This type of loan provides a flexible and cost-effective financing option for businesses to manage their cash flow, invest in growth opportunities, or meet urgent financial requirements.
Key Features:
- High Loan Amount:
- Loans can be availed up to 80% of the value of securities pledged.
- Loan amounts depending on the collateral.
- Approved Securities:
- Equity shares: Up to 50% of the Net Asset Value (NAV).
- Mutual funds (Equity and Debt): Up to 50% and 80% of NAV respectively.
- Life insurance policies, National Savings Certificates (NSC), Kisan Vikas Patra (KVP), non-convertible debentures, and other approved securities.
- Flexible Loan Options:
- Overdraft Facility: Draw funds as needed and pay interest only on the utilized amount.
- Term Loan: Fixed loan amount with regular EMI payments.
- Interest Rates and Charges:
- Competitive interest rates starting from 9.00% per annum.
- Processing fees vary bank to bank.
- Minimal Documentation and Quick Disbursal:
- Simplified documentation process.
- Fast approval and disbursement, especially with digital LAS offerings.
- Digital LAS:
- Completely online application process.
- Instant disbursal within minutes through NetBanking.
- No physical documentation required.
- Transparency and No Hidden Charges:
- Transparent process with no hidden fees.
- Flexible repayment options and no prepayment penalties.
Eligibility Criteria:
- Businesses must pledge approved securities such as shares, mutual funds, or life insurance policies.
- Securities must be free from any encumbrances or liens.
Documentation Required:
- KYC documents of the business and authorized signatories.
- Details of the securities being pledged.
- Bank account statements and other financial documents as required.
Documentation Required
- KYC Documents: PAN and Aadhaar of the business and its promoters.
- Financial Statements: Last 2 years’ audited financials and the latest ITR.
- Bank Statements: Last 12 months’ bank statements to assess cash flow.
FAQs
What is a Loan Against Securities?
A loan where businesses can pledge their shares, mutual funds, or other securities to obtain funds without selling their assets.
How does the overdraft facility work?
Businesses can draw funds as needed from the overdraft account and pay interest only on the amount utilized and for the duration it is used.
What are the benefits of Digital LAS?
Instant loan disbursal, low-interest rates, minimal documentation, and flexibility in choosing and managing pledged securities.
Are there any prepayment charges?
No, there are typically no prepayment penalties, allowing businesses to repay the loan early without additional costs.