Businesses have several loan products to choose from and one of the most common for them is a secured loan. This form of borrowing requires you to hypothecate an asset with the lender to get access to funds. It carries low risk due to the hypothecation and the lender can extend a high loan amount. You can use any property for the purpose. It can be a residential property or commercial property that is in used, rented, or leased. Since it has an asset as security, you get to enjoy low loan against property rates.
Businesses are often in need of funds to meet their capital expenditure and this is when they consider applying for a loan. If you own an asset, you can enjoy lucrative terms on the loan by hypothecating it. The process of hypothecation is simple and straight forward. The title of the property should be clear and it should not be hypothecated anywhere else. In the case of co-owners of the property, they will become co-applicants for the loan. After you repay the entire loan amount, the lender will transfer the property back to you.
Sole proprietors, partnerships, private companies, and public companies are eligible for the loan. You can make an online loan application from the comfort of your office. Simply fill the application form and submit documents of identity proof, address proof, income proof, business registration documents, and projected financial statements. You will also need the original title deed. When you apply for the loan, the lender will hire a market valuer to estimate the market value of the property. The loan amount will be based on the same. It helps to know the market value of the property before you approach the lender so that you can negotiate the terms of the loan.
Once the loan application is approved, you will have the funds in no time. The biggest advantage of the loan is that you can use the funds for any purpose in the business. There are no restrictions on the end use of it and you can allocate the funds exactly where you intend to. However, it is very crucial to repay the loan in due time. You will have to pay it in EMIs over the tenure and in case of default, you could lose the property. The lender has a right to auction the property to recover outstanding dues in case of non-payment of EMIs.
Prepare a repayment schedule to ensure that the loan is paid in time. You can also compare loan against property rates to ensure that you get the best deal at the time of borrowing. Different lenders offer the loan at the varying interest rates and you can compare the same online. This loan will help take your business to new heights without using the emergency funds. You can make the most of your idle property as you elevate the business and turn your aspirations into a reality.