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Loan Against Property for Startup Business

Banks and other financial institutions often provide loans for startup businesses after the applicant has met their eligibility criteria and furnished the documents required. One of the most convenient loans to procure is the loan against property for business. Getting a loan against property for new business allows you to get a loan while pledging your property as collateral to the financial institution or bank that is offering the loan. 

Features and Benefits of Startup Loan Against Property

There are several benefits in availing a loan against property for business owners, which differentiate it significantly from a personal loan. Read on to learn more about the features of this loan and how it can help you set up your new business.

  • 1. Availing a loan against property for business is significantly cheaper than a personal loan that can be availed for the same purpose. It is a significant difference and can prove to be a make or break decision at the time of starting a new business since there are many heavy expenses to be made at that time.

  • 2. Availing a loan against property for business owners does not mean that you are required to vacate your property or hand it over in any way to the bank or financial institution offering the loan. You and your family can continue to stay in the property even after you have pledged it as collateral for a business loan.

  • 3. It is significantly easier to avail a loan against property for new business than to avail a personal loan or any other loan, for that matter. Since you are offering the property as collateral, the financial institution offering the loan can be assured that they can take over the property in case you are unable to repay the loan as per their schedule and conditions. This makes it a lot easier for you to avail a loan against property for new business.

  • 4. The loan amount availed against property can also be much higher than the amount availed through a personal loan or other kinds of loans. For instance, on Bajaj MARKETS different partners offer funds upto Rs. 3.5 crore as loans against property, and its loan to value (LTV) ratio ranges between 75-90% of the property’s present market value.

Loan Against Property Eligibility Criteria for Startup Business

The eligibility criteria for availing a loan against property for new business is simple and easy to meet. While it is possible for both salaried and self-employed individuals to avail a loan against property for business, the eligibility criteria differ. Read on to learn the eligibility criteria you are required to fulfill in order to avail a loan against property for business through Bajaj MARKETS.

  • For Salaried Individuals

  1. It is essential that salaried individuals are employed with an MNC or a private firm of repute

  2. Salaried individuals must reside in Tier-I cities, such as Delhi, NCR, Mumbai, MMR, Hyderabad, Chennai, Bengaluru, Ahmedabad, or Pune to avail a loan against property for business.

  • For Self-Employed Individuals

  1. Self-employed individuals need to have a steady source of income in order to be eligible for availing a loan against property for new business.

  2. The loan against property for business owners is only available to individuals residing in Indore, Bengaluru, Nagpur, Pune, Vijayawada, Madurai, Surat, Chennai, Lucknow, Delhi, NCR, Cochin, Hyderabad, Mumbai, Ahmedabad, or Jaipur.

Documents Required for Startup LAP

The documents an individual is required to furnish in order to avail a loan against property will also differ based on their employment status. Read on below to learn about the documents you are required to furnish in order to avail a loan against property for business.

  • For Salaried Individuals:

  1. An ID issued by the Indian government, such as Aadhaar card, voter’s ID, PAN card, etc.

  2. An address proof certified by the Indian government, such as the Aadhaar card, voter’s ID, passport, ration card, utility bill, etc.

  3. Your latest salary slip issued by the organization

  4. Your bank account statements for the last three months

  5. Your Income Tax returns for the latest financial year

  6. Documents of the property you wish to mortgage for the loan.

  • For Self-Employed Individuals:

  1. An ID issued by the Government of India, such as Aadhaar card, passport, voter’s ID, etc.

  2. A proof of residence certified by the Indian government, such as Aadhaar card, voter’s ID, utility bill, etc.

  3. Bank account statements from the last six months

  4. Documents of the property you wish to mortgage for the loan.

Regardless of your employment status, you will be required to provide the documents relating to the property you are hoping to mortgage for a loan to the financial institution or bank from which you wish to avail the loan.

How to Apply for Startup Loan Against Property?

A loan against property for business owners can be very easily availed through the websites of financial institutions. In most cases, once your loan application is approved, the amount will be disbursed to your account without delay. Read on below to learn how you can easily apply for a startup loan against property for new business online.

  • Step 1: You will need to fill up a form online with details of your name, address, date of birth, and how you can be contacted.

  • Step 2: Once the initial form is filled, you are required to submit details of your income so that you can be matched with the best loan options as per your credit profile.

  • Step 3: Once you submit the loan application form, you will be contacted by representatives of the financial institution to whom you can then submit the relevant documents and ensure property and identity verification.

Once these steps have been completed, you will be informed about whether your loan against property application has been approved. Once it is approved, the loan amount will be disbursed to your bank account.

5 Reasons You Should Use a Loan Against Property to Start your Business

As evident from the features listed above, availing a loan against property for new business is simple and a massive advantage considering the high expenses that any business owner must incur while starting their business. Read on below to find out five reasons for why you should avail a loan against property for business.

1. Simple Eligibility Criteria: As mentioned above, meeting the eligibility criteria and submitting the application for a loan against property are extremely simple. These are quick processes, which is extremely beneficial when you are setting up your business. Since there are many expenses that you need to incur, it is best to have access to funds in the shortest possible time and with maximum convenience.

 

2. Flexibility in End Use: There are several expenses to be made while setting up a new business, such as creating an office, buying office supplies and furnishings, hiring employees, buying machinery, etc. By availing a loan against property for new business, you can easily divert the funds towards whichever requirement is most urgent. There is no interference from the lender in this regard, which makes it significantly easier and quite seamless for you to set up your business.

 

3. Flexible Repayment Tenure: A flexible repayment tenure ensures lesser stress over turning profits in order to ease your debt burden. The repayment tenure can go up to 20 years, which means you can run your business comfortably without worrying about how to repay your loan.

4. Minimum Interest: Since the lender is offering you a loan against property, the debt burden is significantly lesser. The interest rates offered with a loan against property for business owners is also quite low compared to the interest rates offered with other kinds of loans, including personal loans and business loans.

 

5. Best Use of Property: While property is one of the best financial assets you can have, it is possible to enhance its utility. Not only can the property enable you to get a lower interest rate on your loan, it can also enable you to get a higher loan amount.

Starting a business can be an expensive proposition for new business owners owing to the sheer number of things to be purchased and set up. Availing a loan against property ensures that you can do all of this comfortably and without being subjected to massive debt. 

Loan Against Property for New Business FAQs

  • ✔️What is required to get a startup business loan?

    While each lender may require different documents, you will need to provide proof of your identity and residence, among others, to avail a startup business loan.

  • ✔️How do I start my own startup?

    Aside from an idea, you need funds to start your own startup. You can easily avail a loan against property and fund your startup.

  • ✔️How much loan can I get to start a business in India?

    You can avail a loan against property of upto Rs. 5 Crores for starting your business.