Lease Rental Discounting (LRD) provides an alternative avenue to secure finance from banks and lending institutions. This arrangement involves the premises’ owner (borrower), the tenant (occupying or leasing the premises), and the financial entity or corporation. The loan approval is based on fixed rental income over the lease period, uniquely with the condition that the rent is deposited directly with the lender, not the borrower. Specializing in Lease Rental Discounting, Indexia Finance is your trusted partner.
Indexia Finance Lease Rental Discounting
Lease Rent Process:
- Personal Interview and Discussions:
- Engaging in discussions, bank officials ensure a comprehensive understanding of customers’ financial needs.
- Field Investigation:
- The bank’s investigation team visits the applicant’s business or workplace to gather essential information.
- Document Verification:
- Meticulously verifying all submitted documents against originals to establish authenticity.
- Credit Verification:
- Checking the applicant’s credit history through agencies like the Common Information Sharing Bureau (CIBIL).
- Project Analysis:
- Assessing the background, technical feasibility, financial viability, and market conditions for new projects.
- Sanction and Disbursement:
- Issuing a sanction letter with specified terms upon approval, which the applicant accepts.
- Processing Charges:
- Payment of processing charges, as per the bank’s specifications, to proceed with the disbursement procedure.
- Documentation Procedure:
- Including legal opinions on property documents and valuation reports. Submission of original documents of immovable assets.
- Loan Disbursement:
- Disbursing the loan after the Legal Department certifies the correctness of the documents.
Benefits of Lease Rental Discounting (LRD)
Lease Rental Discounting offers a myriad of advantages for both borrowers and financial institutions, making it a compelling financial strategy in the real estate landscape.
- Enhanced Liquidity:
- LRD provides borrowers with immediate access to funds based on the anticipated rental income, offering increased liquidity for various financial needs.
- Flexible Repayment Terms:
- Borrowers benefit from flexible repayment terms, aligning with the lease period and ensuring a manageable financial commitment.
- Efficient Financial Planning:
- With a fixed rental income as the basis for loan approval, LRD facilitates efficient financial planning for both borrowers and lenders.
- Streamlined Approval Process:
- The structured nature of LRD, involving a clear assessment of rental income and property valuation, streamlines the approval process, leading to quicker disbursal.
- Utilization of Property Assets:
- Borrowers can leverage their property assets effectively, unlocking the financial potential of their real estate holdings without selling the property.
- Risk Mitigation:
- For financial institutions, LRD offers a lower risk profile as the loan is backed by tangible rental income, providing a secured and reliable avenue for lending.
- Competitive Interest Rates:
- LRD often comes with competitive interest rates, making it an attractive financing option for borrowers seeking cost-effective solutions.
- Business Expansion Opportunities:
- For businesses leasing premises, LRD presents an opportunity to obtain funds for expansion or other strategic initiatives without straining existing resources.
- Tax Advantages:
- Borrowers may enjoy tax benefits on the interest paid on LRD, further enhancing the financial appeal of this financing method.
- Professional Guidance:
- Financial institutions, like Indexia Finance, specializing in LRD, offer professional guidance, ensuring borrowers navigate the process seamlessly and make informed decisions.
Required Documents for Lease Rental Discounting
The borrower and/or the guarantors have to provide the following documents to the banks or the lending institutions while submitting the Lease Rent Discount Loan Application. Certain documents may be demanded by the bank or the lending institutions in the post-sanction phase or on a periodical basis.
- Latest Electricity/Telephone Bill or
- Receipt of Maintenance Charges or
- Valid Passport or
- Voter’s Identity Card or
- Purchase/Lease Deed/ Leave & Licence Agreement of Residence or Office Premises
- Valid Passport
- PAN Card
- Aadhaar Card
- Voter’s Card
- Any other photo identification issued by Government Agencies.
- VAT/CST Registration No.
- MIDC Agreement
- SSI Permanent Registration Certificate
- Warehouse Receipts
- Shop & Establishment Act Certificate
- 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 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 year’s Bank statement of the Firm
- If the existing loan is, then the sanctioning letter and repayment schedule of the same
- Firm/Company’s PAN Cards
- Individual Income Tax Returns of the Individual/Partners/Directors for the last three years
- Last one year’s Bank statement of Individuals, Partners, Directors
- SEBI formalities in the 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