Necessary Guidelines You Must Follow to Refinance Your Business

Unpredictability is a word which goes hand-in-hand with market conditions most of the time. Besides unpredictable market conditions, there’s an uncertainty of whether a business will see profit or loss.

Both startups and established businesses require financing when they are hit with low market performance. Thanks to financial institutions in India, refinancing business is considerably hassle-free. Entrepreneurs can avail Loan Against Property for Business Startup and use it for multiple purposes in business.    

However, before knowing the guidelines, take a look at the features of a loan against property first:

• Secured Loans

Loan against property is a secured loan that requires a customer to pledge their asset as collateral. Here, maintaining a good credit score is not mandatory for loan approval, unlike unsecured loans.   

• High Financing Amount

Business owners can get up to Rs. 3.5 Crore with a loan against property. One can utilise the amount to finance a variety of requirements as there’s no restriction on its end-use.    

• Minimal Documentation

The loan against property documents required by lenders are minimal which lower the loan approval time within 72 hours.

• Extended Tenures

Loan against property tenures can go up to 20 years, longer than any other unsecured loans.

• Minimum Eligibility Criteria  

Customers only have to fulfill minimum loan against property eligibility criterion’s to avail it. They have to be an Indian citizen, aged between 25 and 70 years.

• Low Rate of Interest

Loan Against Property Interest Rate is also considerably affordable compared to unsecured loans. So, this is always an apt refinancing choice in times of uncertain market conditions.  

Now, to enjoy such attractive features of a loan against property, you need to follow a few necessary guidelines.  

Some of these Guidelines Include

• Set Your Purpose for Refinancing

Set your purpose of refinancing as your first step before applying for a loan against property for business startup. You may require refinancing for consolidating debts, working capital, payroll, etc.

Having a clear purpose of refinancing will help you determine the amount of loan you require.  

• Check your Existing Debts

Keep in check your existing debts before applying for a mortgage loan. Create a list of all your debts and their tenures, interest rates, total monthly payments, and prepayment charges.

Creating a list of your debts will also help you estimate the refinancing that you need for debt consolidation and managing your finances.

• Go Through your Financial Statements

Going through your financial statements will help you determine if you can repay the loan against property India. Furthermore, financial institutions may also require you to submit your business turnovers for the previous year audited by a CA.

You should go through the balance sheet, profit & loss statement, income tax returns, and bank statements.    

Additional Read: How to Get Funds in Business Startups  

• Compare the Loan Options

Comparing the loan options available will be the next guideline to follow. Numerous financial institutions provide loan against property for business startup, and you need to compare their features and benefits before opting.

• Fulfil the Documentation Process and Eligibility Criteria

Before applying for refinancing, you need to fulfil the documentation procedure and eligibility criteria of the lender. Your loan will get approved fast if you satisfy all of their terms and conditions.

Following these guidelines will help you decide how you can refinance with a loan against property for business startup. Using it proficiently can help you recover the health of your business.

Tags: Refinance Your Business

Category: Business Debt