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A Comprehensive Guide to Business Loans Against Property and Shares
By: Libord Broking
Business Loans Against Property:
Business loans against property, also known as secured business loans, involve using a property or real estate asset as collateral to obtain funding. This type of loan provides the lender with a sense of security, as they have the option to sell the property to recover the outstanding debt if the borrower defaults on the loan.
Pros: Lower interest rates: Since the loan is secured, lenders often offer lower interest rates compared to unsecured loans.
Higher loan amount: The collateral's value allows you to access larger loan amounts.
Longer repayment tenure: Secured loans often come with extended repayment periods, easing the financial burden on the borrower.
Loans Against Shares Promoter Funding:
Loans against shares promoter funding cater specifically to business promoters or major shareholders who wish to raise capital by pledging their shares. In this scenario, shares of the company act as collateral, and the loan amount is determined based on the value of these shares.
Pros: Access to quick funding: The loan application and approval process are typically faster compared to traditional business loans.
Retaining ownership: Promoters can continue to retain ownership and control of the business while using the pledged shares as collateral.
Loan Against Physical Shares:
In the past, shares of companies were issued as physical certificates. Although electronic shares have become the norm, some people may still hold physical share certificates.
Utilizing old assets: People with physical share certificates can unlock the value of these assets without selling them.
Non-Banking Finance Company (https://www.libordbroking.com/
A Non-Banking Finance Company (NBFC) is a financial institution that provides various banking services like loans, advances, and investments but does not hold a banking license. These institutions play a vital role in the financial ecosystem by catering to the credit needs of individuals and businesses, especially those who may not qualify for loans from traditional banks.