Business

Is it Advisable to Procure a Mortgage Loan for your Business?

Business owners are expected to find the post-pandemic era challenging enough in terms of financial stability. Be it envisioning newer strategies to stay relevant or planning out a survival strategy to mitigate threats, entrepreneurs are more likely to rely on financial help, post Covid19. Then again, a majority of ventures require sizable investments that cannot always be met with personal credit lines.

On the other hand, business loans can be trickier to get, courtesy of the extensive documentation and stringent guidelines. Therefore, if you are a business owner who is either looking to save or expand an existing business, a Mortgage loan is quite a reliable option.

Why is Loan against Property a good option for Smaller Businesses?

If you have a property or valued establishment to spare, it is advisable not to get into the intricacies of a business loan. Smaller businesses often find it hard to manage licenses and GST documents, which hinder their application process, despite the government making new reforms for them. This is where a LAP comes in handy as it can offer a decent sum that is adequate enough for setting up a new business or expanding the existing one.

If you are looking for additional reasons for selecting LAP for Business, consider the following:

  • Unrestricted Usage

While an education loan can only be used to finance academic progress, there are no usage restrictions on loans against property. Some might argue that even personal loan offers similar flexibility, but the sum is often less than adequate for business. 

  • Lower Interest Rates

Mortgage loan interest rates are extremely competitive, considering the secured nature of the same. As you are already giving collateral for the sum, the lender need not tag you for a higher interest rate.

  • Larger Sum

If you have a property that is valued at 60 lakhs, a reliable and considerate lender can even offer you a loan amount of up to 36 lakhs-37 lakhs or 60 percent approximately. Therefore, a mortgage loan is probably the best way to go about, if securing, safeguarding, and skyrocketing the business to newer heights is concerned.

  • Lower EMIs

LAPs are long tenure loans with lenders, allowing you to go up to 20 years in select cases. Clubbed with lower mortgage loan interest rates, the longer tenure can be a blessing in disguise for businesses. The EMIs are affordable, which in turn puts minimal pressure on your short-term financial standing. 

  • Quicker Approvals

Loan against property is one of the fastest credit lines to get approved. As it is a secured loan, banks and other financial institutions hardly have anything to worry about. However, you need to ensure than the property documents are in place, and the concerned establishment isn’t open to disputes.

Business owners often require additional help to scale beyond the existing challenges, which are primarily presented by the pandemic. This is where your property can come to your rescue, opening up a new option to get financial help for continuing and streamlining business operations.

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