Lease rent Discounting
Lease Rent Discount is another method to obtain finance from bank or other lending institutes.
- Lease Rent Discount is another method to obtain finance from bank or other lending institutes. Lease Rent Discount (LRD) consideration is between the borrower who owns the premises, the tenant who has rented the said premises or taken on lease and the bank or financial institute or Corporate. The rent is considered as fixed income over a stipulated time i.e. lease or rent period or tenure.
- The agreement is between the borrower and lender and the major term of repayment is the rent is directly deposited with the lender and not with the borrower. The Borrower is sanctioned a loan based upon the rent to be collected over the period of lease.
- Lease rental discounting is a great way to generate funds from owned assets and use them for further investments.
- Under Lease rental discounting, the borrower avails a loan by pledging the future rental income to the lender. In this way the borrower can get money upfront in lieu of the rental income which would come to him over a period of time.
- This product is typically useful for people who have significant rental incomes but at the same time may not be able to leverage their property directly and avail a loan against it. This could be because the property may already have a loan against it.
- One does need to remember that only 75-80% of the value of the rental income for the remaining lease period is what the user can expect to avail as a loan amount. The tenure or duration of such loans is much shorter than other property based loans and usually linked to the amount of time remaining for the lease on the property to expire.
- Most institutions discount upto 90% of the value of the remaining lease, provided the borrower can demonstrate the ability to pay the installment for such a loan.
The borrower and/or the guarantors have to provide the following documents to the banks or the lending institutions while submitting Overdraft against Gold Application. Certain documents may be demanded by the bank or the lending institutions in post sanction phase or on periodical basis.
- Address Proof : Latest Electricity/Telephone Bill or Receipt of Maintenance Charges or Valid Passport or Voter?s Identity Card or Purchase/Lease Deed/ Leave & License Agreement of Residence or Office Premises.
- Identity Proof : Valid Passport, PAN Card, Voter?s Card, Any other photo identification issued by Government Agencies.
- Business Proof : VAT/CST Registration No. or MIDC Agreement or SSI Permanent Registration Certificate or Warehouse Receipts or Shop & Establishment Act Certificate or Copy of Lease Agreement along with the latest Rent paid Receipt.
- Business Profile on Company?s Letterhead.
- Partnership deed in case of partnership firms.
- Certificate of incorporation, Date of Commencement of Business and Memorandum of Title Deeds, Form 32 in for Addition or Deletion of Directors in case of companies.
- Last three years Trading, Profit & Loss A/c. and Balance Sheets (duly signed by a Chartered Accountant wherever applicable).
- Last one years? Bank statement of the Firm.
- If existing loan, then sanctioning letter and repayment schedule of the same.
- Firm/Company?s PAN Cards.
- Individual Income Tax Returns of the Individual/Partners/Directors for last three years.
- Last one years? Bank statement of Individuals, Partners, Directors.
- SEBI formalities in case of listed companies.
- Share Holding pattern of Directors duly certified by a Chartered Accountant.
- List of the Existing Directors of the company from the Registrar of the Companies.
- Written & approved confirmation of having No Legal Suit filed against any of the directors. If any such legal suit or proceedings are pending then the details of such legal suit or proceeding.
In India there are many Bank Lenders who provide Term Loan.
Process of this bank / lender is same.
- Application form is login.
- Personal Discussion is done by bank officer with customer.
- Bank's Field Investigation (All documents are Verify by bank which given with application form).
- Bank cheques CIBIL report.
- Sanction Letter.
- Signing of agreements and submitting post-dated cheques.
- Disbursement.
