SME Loans Against Property: Advantages And Disadvantages

Are property loans the answer to the financing problems that have been plaguing SME’s? Let us take a closer look on how SME’s need major help in the area of financing and how taking a loan out on property can be beneficial to them.
The only deterrent seen in the growth of SME’s today is their lack in financial backing. Also to be noted is the fact that often times they have difficulties due to simple reason that their finances are not being effectively managed. This is where taking out a loan against property comes into picture.

Loans Against Property
These enterprises are categorized based on the number of personnel working under them. The efficient use of resources also includes the use of any available property that can be placed as collateral to secure a loan to finance the highly promising SME. This is where loan on property comes in. It gives both breathing room and time for the SME to grow and start giving returns. This also ensures the maximum use of all avenues that can be found. Both residential as well as commercial property can be used to apply for loan against property at FinanSME.

Advantages Of Property Loans
• It is one of the most easily available loans in the market.
• The loan can be of up to 70% of the value of the property.
• The processing time is much less
• If value of property rises during the tenure, the owner can get a top up on the loan.
• A lot of convenient payment options are available.
• Both residential and commercial property can be offered as collateral.

All these combined with the fact that financial backing for SME’s is a crucial factor we can say that taking out a loan against property is one of the easiest solutions presents.

Disadvantages Of Property Loans
The flip side of the coin has a few major points to be brought to attention

• The most basic fact is that in a country like India people are reluctant to take a loan out on their residential property. This emotional barrier is one that has to be taken down for the business to progress.
• People who can’t manage their debts and finances are often advised against taking out a loan against property.
• Often evaluations end up deeming the value of the property at a lesser price than that of the actual market price.
• There is a slight risk to the lender.
However, weighed against all the positives the negatives fall a little short.

FinanSME And Property Loans:
SMEs get access to effective financing and management services through FinanSME property loans. The loans can be availed from both banks and NBFCs. The choice of the source is left entirely up to the applicant. The finances thus procured can be put into the building up of better infrastructure, improvement of quality and the overall growth of the SME as a whole.

Some major benefits include
• Simple and accommodating repayment terms.
• Minimum hassle on documentation and formalities.
• In the industry there is very low interest rate on loan against property.
• They provide the fastest loan approvals.

The business can be effortlessly taken to unchartered heights. All you have to do is let the property speak its worth.

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We believe there is a need for easing the operating environment for the Micro, Small And Medium Enterprises sector. Access to finance, redefining investment limits, could transform MSMEs into a hotbed of entrepreneurial activity.