Funding for the Indian start-up industry has witnessed a steep growth from Rs. 1,391.5 Crore (2017) to Rs. 2,922.8 Crore (2018). Such a dramatic increase in the availability of financing for start-ups reflects India’s recent prospering business image and its emerging state as one of the fastest-growing economies globally. Such business endeavors are boosted by Government of India’s flagship initiatives like Start-up India.
Entrepreneurs taking a plunge in this market often approach NBFCs seeking loans that would provide considerable amount with an affordable rate of interest. One of the most preferred financial products is a loan against property for business start up. Anyone who wants to start a business can avail for the start up loan on property but the necessary thing is to meet the eligibility criteria for it.
A loan against property is a secured credit in which lenders sanction the funds against the value of a mortgaged collateral. The amount so obtained is determined by the current market value of the asset mortgaged. Depending on this, lenders calculate the loan amount (this may go up to 75% of the market value).
However, there are multiple other reasons, which make a loan against property in India the favored financial aid as seed funding.
1. High-value Credit Amount:
With a loan against property, borrowers get the benefit to avail a large value of funds. This is exceptionally crucial, considering that entrepreneurs require substantial financing to invest in their start-ups. With loan amounts as high as Rs. 3.5 Crore, businesspersons can meet all their professional requirements adequately.
If you need a higher amount of loan, ensure that the property to be mortgaged has high market value and is positioned at a premium location.
2. Lower Rate of Interest:
With a mortgaged property as a reassurance of repayment, lenders are willing to offer loans at a comparatively lower rate of interest. This plays a crucial role in lowering the EMI amounts, and hence, ensures that there is no excess strain on a budget of the borrower. Such features make this secured loan an ideal choice for seed funding.
Additionally, a business person should also weigh in the benefits of floating interest rates vs fixed interest rates and settle upon the one that caters to their requirements. It is even better if they approach leading financial institutions that provide affordable loan against property interest rates on both floating and fixed types.
3. No End-usage Restrictions:
Starting a business from scratch needs funds for numerous sectors. This includes infrastructure, staff, marketing, purchasing equipment, plant, setup, etc. This is where loan against property for business start-up provides the maximum benefit – its multi-usage facility. Entrepreneurs can utilize the credit amount to meet all their professional financial goals with no end-use restrictions. Because we all know that a business startup needs more funds than any other thing. In such case, if you own a property you can avail the loan easily for your business.
With a loan against property, business owners can additionally fund their personal financial requirements like pursuing higher education abroad, managing wedding expenses, handling medical expenditures, and much more.
4. Affordable EMIs:
Entrepreneurs often find it challenging to make timely EMI payments due to financial crunch or poor money management. Thus, it is essential that borrowers go for financial institutions providing nominal fees and charges so that EMIs are lower and manageable. It is one of the ways to ensure you don’t default on the loan against property.
Reputed NBFCs like Bajaj Finserv provides this secured loan that comes with an easy-to-meet Loan Against Property eligibility criteria and borrower-friendly features like –
~ Easy Balance Transfer facility
~ Hassle-free credit approval and fast disbursal
~ Online account management via a customer portal
~ Minimum Loan Against Property documents required
~ Flexible tenure of up to 18-20 years
Apart from these Bajaj Finserv is a leading NBFC which provide such types of loans. The features and benefits offered by this make the process to avail finances easy and quick. Pre-approved offers are available on numerous financial products including secured credits like home loan, and unsecured credits like personal loans, business loans, etc. You can look for your pre-approved offers by providing a few details like name and phone number.
5. Extended Tenure:
As we all know that start-ups require multiple investments because it helps it to grow at a faster pace. However, such regular expenses may be compromised in case the monthly outflows towards your loan repayments are higher. To avoid this and reduce your EMI, go for a longer tenure that would incur lower EMIs. It ensures that the loan availed is utilized smartly to enhance the progress of the business.
Thus, if you are looking for seed funding and have a high-value asset that can incur higher loan amount, your best choice can be a Loan Against Property for business start-up. All that you need to do to avail this mortgage loan is submit minimum documents and meet the eligibility criteria required.
Note: The article is submitted by one of our guest editor and spokenbyyou will not be responsible for any legal aspect of it.