When business owners need significant capital ,
When business owners need significant capital , ₹50 lakh to ₹5 Cr , they typically consider two options: an unsecured business loan or a Loan Against Property (LAP). While business loans are faster to process, LAP often makes better financial sense for established businesses with property assets.
The interest rate differential is substantial
The interest rate differential is substantial. Unsecured business loans in India currently carry rates of 14-22% per annum, while LAP rates range from 8.5-12%. On a ₹1 Cr loan over 10 years, this difference translates to ₹30-50 lakh in total interest savings.
LAP also offers higher loan amounts ,
LAP also offers higher loan amounts , typically 50-70% of your property's market value , and longer repayment tenures (up to 15-20 years versus 3-5 years for business loans). This means lower EMIs and better cash flow management for your business.
The trade-off is processing time and the risk
The trade-off is processing time and the risk to your property. LAP typically takes 7-15 days to process versus 2-3 days for an unsecured business loan. And if you default, your property is at risk. At DealPlexus, our loan advisory team helps you weigh these factors based on your specific situation and find the optimal financing structure.
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