There has been an increased focus on entrepreneurship in India in the past couple of years. With the government easing policies and providing several benefits to small business owners, the start-up culture has taken firm roots in India, and many individuals aspire to set up their own ventures. However, there is one problem that is common to most aspiring entrepreneurs and small business owners – funding.
It is a fact that arranging for capital is almost as challenging as setting up a new venture. However, you can choose to borrow money against any property you own to procure the initial capital needed to set-up your business with minimal documentation at an equitable rate.
What is Loan Against Property?
Loan against property for business offers quick money with less hassle for business expansion by enabling entrepreneurs to mortgage their property and borrow money against it. Many individuals also mortgage their property to borrow money for personal requirements, like education and wedding, but this option is most popular with small businessmen owing to the low-interest rate as compared to an unsecured personal loan.
If you are a self-employed individual or are planning to start a new business, here is what you need to know about securing business finance against your property:
- Loan against property interest rates is much lower when compared with unsecured personal loans.
- By mortgaging your property, you can borrow up to 60 percent of the property’s cost with a financial institution like PNBHF.
- Borrow money as a lump sum or avail an overdraft facility.
- Flexible repayment options and extended repayment tenure of up to 20 years.
- Fast loan disbursal with minimal documentation. Some lenders like PNBHF also offer door to door personalized services for borrowers.
Who is Eligible For Loan Against Property For Business?
Loan against property is offered by leading financial institutions in India at competitive interest rates. Both self-employed and salaried individuals can avail such a loan by mortgaging any commercial or residential property.
If you are a self-employed individual above the age of 18 years and earning more than INR 25,000 per month, you can apply for a loan against property to turn your business idea into reality.
Most banks offer multiple eligibility programs and will assess your loan application on criteria such as monthly income, age, property value, and your repayment capacity.
If you plan to start a new business and are searching for capital, don’t let your dreams wait by availing a loan against property to get your business off the ground.
If you own a commercial or residential property, you can mortgage it with any of the leading banks in India that offer loans against property to borrow up to 60 percent of the property price.
However, bear in mind that when you borrow money against a property, you can continue to use it. But, you will get the property papers back only after you have paid off the entire loan amount to the lender. Assess your business risk before making the decision of mortgaging your property so that both your assets and business are well-protected.
Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.