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Real Estate Finance

Loan against Property is the perfect way to unlock the hidden value of Borrower’s property. With this loan, the Borrower can fully benefit from life's little surprises he/she may have earlier passed over due to lack of funds. The Borrower can unlock the potential in his property by availing a Loan Against Property (LAP). A LAP is a loan given against the security of his existing property. The benefit is that interest rates on LAP are generally lower than rates on other consumer loans.

FINANCE FOR REAL ESTATE PROJECT

FEATURES OF REAL ESTATE INDUSTRY

Capital intensive industry

Manufacture / Development of long-term assets

Medium-Long term period for completion

Unique method for recognition of revenue

Absence of consistent revenue recognition

“New entity for new project”

 

TYPICAL CONSIDERATIONS

Lack of transparency

Negative profile from banking perspective

Lack of Corporatization

Legal Hassles

Demand-Supply gap

Lack of Financial discipline

 

SOURCES OF FUNDS

EQUITY

Key source is Venture Capital / Private Equity Funds (Domestic & Foreign)

Ideally available from land acquisition stage

Used to share risks involved in the Project

Costly compared to Debt / Advance sales

Repayment in mode of profit sharing

Repayments are made based on availability of funds

 

DEBT

Available only for completion of construction

Used to finance working capital requirement

Cost is less compared to Equity or Sales bookings

Regular interest and installments of principle to be paid as per agreed schedule

Lender does not participate in any risk and gets cover

ADVANCE SALES

Available from Land acquisition stage

Cost is high compared to Debt but low compared to equity

Marketing risk & partly execution risk is assumed by the Investor

Ideal source of funds

 

KEY CONSIDERATIONS FOR FUNDING

Developer Background

Location of the Project

Entry Valuation

Stake offered & Rights of the investors (Reserved Rights)

Exit period and visibility

Financial Closure for the project

Return on Investment

Legal status and structure

Business Plan for the Project

Our Products
Agri Warehousing Finance
Commodity Finance
SME & Mezzanine Finance
Distressed Asset Finance
Equipment Finance
Project Finance
Loan Against Gold
Real Estate Finance
Margin Trading Funding
Inter Corporate Deposits
 
 
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