From Dreams to Reality: How Small Businesses Thrive with Loan Against Property

Introduction

Running a business is not easy. It takes a lot of hard work, dedication and funds. Most small businesses struggle to finance their venture. Unsecured loans come with high interest rates which most small businesses might struggle to afford.

Small businesses will require high amounts of capital for its expansion, purchases and working capital. Unsecured loans will not be able to fund all this. Here’s where Loan Against Property proves useful. LAP offers high amounts of loan at competitive interest rates and flexible repayment period. In this Blog we’ll delve deeper into how LAP helps small businesses thrive

What is Loan Against Property.

Loan Against Property is a secured loan where you can secure funding by pledging your property. You will not be losing your ownership to your property. To put it concisely, LAP is a way to secure funding through your property without actually selling it.

Anyone can apply for a loan against property. Your employment type and property type doesn’t matter. You can be self-employed or salaried, your property can be residential, commercial or industrial. Either way you are eligible to apply for it.

How Does It Help Small Businesses?

For Small Businesses, funding is what secures their future. They could have a very innovative, one-of-a-kind, game changing approach. But without proper funding it is going to get them nowhere. A Loan Against Property will help them with the funding part. A personal loan or a business loan will only be able to offer a certain sum of money. With LAP you’ll be able to secure high amounts of funds. You generally receive 50%-65% of the property value as the loan amount. For example, if your property is worth 1 crore rupees, you’ll receive anywhere between 50 lakhs and 65 lakhs as your loan amount. This is way more than what you will receive with a personal loan or a business loan.

Due to it being a secured loan, the interest rates are lower. The presence of collateral reduces the risk for the lenders. Hence the low interest rates. This allows the owners to invest in their business without feeling the burden of heavy EMIs.

The repayment tenure can go up to 15 years. This leads to smaller amounts of EMIs. This allows the owners to concentrate more on the business and worry less about the loan. It also helps maintain the working capital.

LAP can be used for multiple purposes. Unlike business loans that specify where you must use your funds, LAP allows you to use it anywhere you want. You can use it to hire talent, expand the business, make purchases etc. This gives the owners more freedom as to how to proceed with their business.

Using LAP for Business Growth

Getting the loan is only the first step. How you utilise it is where the real magic lies. Small business owners must plan wisely to ensure growth.

LAP can be used to expand operations. It could be to open a new branch, move to a bigger workspace or set up a warehouse. LAP can be used to support physical expansion without affecting regular working capital. Small businesses can scale up smoothly without affecting their continuity.

LAP can be used for marketing and branding. Marketing and branding are important to secure clients and customers. This costs a lot of money which can be funded using LAP.

Another use of LAP would be to hire and train talent because what good is a business without the right people. Hiring and training requires a lot of money which LAP will help finance.

LAP can also be used to get rid of all existing debts. This helps simplify repayments and reduces financial burdens.

Conclusion

Every Business begins with a vision. LAP helps turn that vision into reality. Tapping into what they already own, Small Businesses can gain what they need without compromising on anything. With right planning and responsibility, LAP can be the catalyst to success for small businesses.