Reasons to Opt for a Loan Against Property for Business Growth

Whether you belong to the manufacturing or service sector, are a doctor, engineer or a chartered accountant, you know that timely, adequate cash flow is key to turning a profit. While you can lean on revenue to meet working capital needs, it may not suffice for large-scale business expansion. When looking to grow your business rapidly, one funding source you can consider is a It involves leveraging the market value of a residential or commercial property that you own to get ample, economical financing speedily.

In fact, when pitted against other funding solutions, you’ll find that a Loan Against Property has certain features that make it an ideal business companion. Take a loan at 5 such factors that make it absolutely indispensable when it comes to growing your business.

Make High-value Purchases with a Large Sanction

Since you pledge a valuable asset as security, in this case real estate that you own, the sanction you get access to is large. Typically, lenders offer financing ranging from 60–90% of your property’s market value. With Loan Against Property, this amount can run up to Rs. 5 Crore*. The quantum of funding is vital to any business move and the large sanction available here allows you to translate ideas into reality effectively.

For instance, if you are a doctor running a private clinic, you could use the high-value sanction to purchase a new premise, buy a CAT scanner or purchase clinic management software. Similarly, if you are a civil engineer you could bank on the large sanction to buy construction-related equipment like tractors, harvesters, rollers and forklifts when seeking to expand your firm's operations from providing supervisory and consultancy services to hands-on construction services.

Expand your Business Profitably with Cost-effective Funding

What's great about a Loan Against Property is that it allows you to manage your cash flow effectively as the cost of borrowing is minimal. Since the loan is backed by an expensive security and a lien can be invoked in case of default, lenders extend funding to you at an economical rate of interest. This means that even as you avail high-value funding, your EMIs don’t come in the way of your business’ growth.

So, whether you are a chartered accountant wanting to hire extra staff for the seasonal rush during tax-filing season or a restauranteur looking to set up a fine-dining outlet, due to the relatively low cost of borrowing you can carry out business expansion without worrying about racking up unmanageable debt.

Additional Read: Use A Loan Against Property To Start Your Business

Take Sound Business Decisions Owing to a Lengthy Tenor

Leveraging your property allows you to plan for the future in a stress-free manner as it offers a long tenor. For example, a Loan Against Property from Bajaj Finserv comes with a flexible repayment term that stretches up to 20 years. With ample time to repay, you can borrow as per your business plans with ease.

For instance, the decision to open an office in a new city comes the need to undertake construction, recruitment and various legal proceedings. While this move will eventually be beneficial, your new unit is sure to take time to yield profits. Nevertheless, by opting for a lengthy tenor you can make sure that your EMI outgo is small, and you have ample finances for your business. Thereafter, once you break even, you can focus on prepaying portions of your loan to get debt-free quicker.

Ensure that Your Supply Chain never Runs Dry with the Dropline Facility

The key to a successful business is having sufficient working capital at all times, as it is the fuel required to run your business’ daily operations, be it paying office rent, employee salaries or purchasing raw material. However, it’s not always possible to predict working capital deficits as they can arise due to unforeseen events such as delayed payments.

A facility you can use to combat such a situation is Bajaj Finserv’s Flexi Dropline feature. With it you can avail of a large sanction, and pay interest only on the amount utilised. Further, you can service the loan via interest-only EMIs through the tenor and pay the principal later, thus alleviating any financial stress. While there are charges involved for the convenience offered by the Flexi Dropline facility, the ability to quickly cater to ad-hoc business needs offset these costs.

Make the Most of Growth Opportunities via a Speedy Sanction

With a loan against property obtaining funds gets easier, as you submit real estate as collateral and do not have to rely on just your financial profile to get approved. This means that should there be a tender floated in the market that you consider lucrative for your business, you can rely on the loan’s swift approval and disbursal process and make a smart business decision.

Additional Read: Know these common myths on Loan Against Property

Moreover, when you apply with Bajaj Finserv you can also benefit from door-step services and get your loan in your bank account in just 4 days. While you must meet the eligibility criteria to qualify for the loan, a convenient way to hasten financing is to first check your pre-approved loan offer. Doing so gives you instant approval via a customised deal.
 

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