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Benefits of Loans Against Property for SMEs

Loans Against Property
31 August 2019
Manya Ghosh
2,943

Table of Contents

Among a lot of loan options provided by financial institutions, one of the most popular is the Loan Against property (LAP). Loan against Property is the loan you can avail by keeping your property (residential or commercial) as collateral with the financial institute. In general, a borrower can get up to 50% to 60% of property value as loan.

LAP is one of the most popular loan options mainly because it allows the SMEs to borrow a large sum of money for their professional needs. For the financial institute, it is a secured loan as the lender holds the right to auction the property in case of failure to repay the loan. The loan generally has easy documentation, low-interest rates, multiple payment options, and long and flexible tenure.

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Scroll down and know different features, uses, benefits and advantages of Loan Against Property for SMEs.

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Did You Know

Disbursement

The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.