Loan Against Property for Business Start-ups: Pros and Cons
Posted: Oct 28, 2018
Starting a business in India comes with a fair share of challenges, but can be intensely rewarding too. Between creating and manufacturing your product, coordinating between vendors and distributors, coming up with marketing collateral, investing in web development, and finally managing a growing team of employees, you’re also going to have to find the funds to see it all through. Venture capitalists and angel investors are always on the look-out for exciting new start-ups to dip their fingers into. However, they usually require immediate returns on investment, liquidated equity, and a percentage of shares in the company.
If you’re in the initial stages of business development and are looking for money to grow, consider taking out a Loan Against Property such as the one offered, which gives you high loan amounts, long loan tenors and an easy, manageable repayment plan. Taking out a loan against property in India to fund your business offers you a lot more autonomy than an investor would, and you’re also making sure all profits come only to you so that you can grow your business.
Here’s why you should consider taking a loan against property for your business start-up.
Loans Against Property are Easier to get than an Investor
Approaching a venture capitalist in today’s saturated start-up market is difficult. Not only do you have to get yourself into a meeting in the first place, you also have to have a solid long-term plan in place that leaves no room for error or experimentation. Most venture capitalists and angel investors require massive returns on investment within a very short amount of time, as well as a liquid equity. This secured loan on the other hand is hassle-free. All you have to do is submit the documents required for a loan against property, and you’ll receive approval from most lenders within 72 hours.
Additional Read: The Truth Behind 5 Loan Against Property Myths
Large Loan Amounts Allow your Business more Freedom to Grow
Even if you plan on approaching a venture capitalist at some point down the line, you need to have a strong product to show them when you do. Your investors, and more importantly, your customers, are going to associate you with the product you put out from day one—so you certainly don’t want to settle for something sub-standard simply because you’re on a tight budget. Depending on your loan against property eligibility, you could be entitled to a loan amount of up to Rs.3.5 crores, which frees your purse strings up enough so you can build a top-quality business from scratch.
Self-Funding Allows you to Remain Autonomous
When you self-fund your start-up, you get to do things your way, which is absolutely essential during the early stages of a business. Developing your idea, your product, and finally your brand, takes a strong sense of vision, one that can be tampered with irredeemably if you bring on too many board members or shareholders early on in the process. Venture capitalists and angel investors often seek active control over a percentage of the business, whereas a loan against property lets you retain complete control.
While there is no right way to do business in the global start-up landscape, it is important to weigh all the options at hand and choose what best suits you. If it’s more freedom, a more flexible repayment plan and a 100% share of the profits you’re after, then a loan against property might just be the right way to fund your business start-up.
Alisha Antil is your best financial helper for insurance. She has a vast experience in finance and loans and provides you the expert advice in ensuring your property and health.