The Ins and Outs of Obtaining a Real Estate Project Loans The real estate and construction industry plays a pivotal role in shaping the economy. Builders are the true visionaries who transform open land into remarkable architectural landmarks, defining the skyline of cities like Pune, Pimpri Chinchwad and Mumbai. Their creativity and expertise bring urban landscapes to life, making modern infrastructure possible. However, securing a real estate project loan remains one of the biggest challenges for builders and developers. In a competitive market like Pune and Mumbai, access to builder financing is crucial for the timely execution of real estate projects. Whether it’s a residential complex, commercial property, or a mixed-use development, obtaining the right financial support can determine the project’s success. Key Considerations for a Real Estate Project Loan Before Apply Builders and developers should consider key factors before applying for real estate project loans to streamline the application process and improve their chances of securing financing. 1. Project Feasibility Financial institutions assess the project’s viability through market analysis, cost projections, and expected returns. A well-documented feasibility study strengthens loan approval chances. 2. Financial Health Developers must present strong financial records, including credit scores, existing liabilities, and cash flow statements. A solid financial profile leads to better loan terms. 3. Detailed Business Plan A comprehensive plan outlining scope, budget, and milestones demonstrates financial responsibility and project potential. Including contingency strategies adds credibility. Types of Real Estate Project Loans Understanding the different types of project loans is essential for navigating real estate financing: 1. Construction Loans It is designed to cover labour, materials, and permits, these short-term loans are disbursed in stages as the project progresses. While essential, they typically carry higher interest rates. 2. Bridge Loans Bridge loans are ideal for covering temporary funding gaps, these short-term loans help developers transition between projects. However, they come with higher interest rates and fees. 3. Permanent Financing Once construction is complete, developers can opt for long-term loans with lower interest rates to refinance their projects. Understanding the Importance of Project Loans for Real Estate Project Success Project loans are essential for real estate ventures, acting as the financial backbone for construction and development. These loans cover costs such as construction materials, inventory, labour, and permits, ensuring projects stay on schedule and investors see faster returns. Successfully obtaining project financing boosts a builder’s credibility and reputation within the industry. It shows stakeholders that the developer has a solid business plan and can manage large-scale projects, opening doors to future funding and partnerships. Additionally, real estate project loans enable builders to leverage their finances effectively, taking on larger projects that might be financially unattainable without external funding. This scalability increases potential profit margins and contributes to the overall growth of the real estate sector. As cities like Pune, PCMC and Mumbai expand, the demand for innovative and well-financed projects will rise, making real estate project loans crucial for builders aiming for success. Key Factors We Considers for Real Estate Project Loans At Terkar Capital, we evaluate real estate project loans based on several critical factors to ensure financial viability and minimize risk. A prime location with strong demand, solid infrastructure, and growth potential increases a project’s success rate and loan approval chances. A proven track record in successfully executing similar projects reassures lenders. We assess the builder’s ability to manage budgets, timelines, and overall project execution. We analyze the developer’s financial health, including cash flow, net worth, existing liabilities, and projected revenue from the project to ensure loan repayment capability. Expected rental income, resale value, and profitability are crucial indicators of the project’s financial sustainability. The expertise of architects, contractors, and project managers plays a key role in ensuring smooth execution and reducing risks. By considering these factors, we ensure that real estate developers secure the right financing to complete projects in Pune and Mumbai. The Loan Application Process for Real Estate Projects The loan application process for a real estate project loan starts with gathering key documents like financial statements, tax returns, project plans, and feasibility studies. A well-prepared package boosts lender confidence and speeds up approval. Builders should apply to multiple financial institutions, comparing terms and considering financial advice. Clear communication with lenders is essential during this process. Hence,  Terkar Capital can assist in this stage by facilitating applications and communication. Financial Institutions then review applications, conduct site visits, and assess project viability. Once approved, funds are disbursed as per the agreed schedule. Thus, staying proactive and organized improves the chances of securing financing. Managing Real Estate Project Loan Funds with Terkar Capital Successful real estate projects rely heavily on the effective management of project loan funds. At Terkar Capital, we guide developers on best practices, emphasizing the need for a clear budget allocation plan that prevents overspending and ensures all project components are adequately financed. This includes allocating funds for inventory, construction, marketing, and a contingency reserve. Implementing a robust financial management system is also essential. This involves tracking expenses, monitoring cash flow, and maintaining accurate records. Regular financial reviews allow for early identification of potential issues, enabling timely adjustments. Terkar Capital is committed to equipping developers with the builder financing instrument and resources necessary to successfully navigate the complexities of real estate financing and real estate project loans. Case studies of Successful Real Estate Projects Here are the case studies that provide valuable insights into the effective use of project loans in real estate development.  One notable example is a luxury residential complex in Pune, where the developer secured a project loan to finance the construction of high-end apartments. The developer conducted thorough market research, identifying a growing demand for premium housing in the area. By leveraging the real estate project loan, they were able to cover the costs of construction and marketing, resulting in a successful launch that exceeded sales expectations. A mixed-use development project stands as another testament to the power of construction loans in Mumbai. The builder utilized financing to transform an underutilized commercial space

Overview – Working Capital Working capital is the difference between current assets and current liabilities. It pertains to the amount by which current assets exceed current liabilities. Current assets encompass cash, inventory, accounts receivables, and other assets that can be converted into cash within a year. Conversely, current liabilities refer to the company’s short-term obligations, including accounts payable, taxes, and other expenses due within a year. In this article, we will explore valuable insights into working capital management, ensuring smooth operations and financial stability. Working Capital = Current Assets – Current Liabilities What is Working Capital Cycle? Working capital holds significant importance for businesses across various industries, including services, manufacturing, trading, and agriculture. It is particularly crucial for cash and carries businesses. The working capital cycle represents the duration it takes for a business to convert input resources into cash through the process of production and sales. These inputs can encompass raw materials, electricity, wages, and administrative salaries. When analyzing the working capital cycle, two key aspects should be considered: The industry-specific  The company’s operations specific A shorter working capital cycle enhances cash flow and reduces the risk of customer payment defaults, making it a desirable goal for businesses. What is the necessity of Working Capital? There are two primary situations where working capital becomes necessary. One is when your current liabilities (especially creditors) are more Or immediately payable than your current assets (especially debtors) are late receivable. So, In simpler terms, when you have to pay your creditors immediately while your debtors take their time to settle their payments. This situation poses a challenge for your business. In the long run, this may hit the cash flow of the company, you need to fix it immediately. Another condition is where your work orders have increased to a substantial level. So as the company grows, there is an increase in demand for the product. To manage the high demand, you must secure the necessary working capital. Understand the process of facilitating working capital Loans from the case study, here. Key components of Working Capital Cycle 1. Current assets: These are assets that can be quickly converted into cash within a year, such as cash and cash equivalents, accounts receivable, inventory, and short-term investments.  2. Current liabilities: These are liabilities that need to be settled within a year, such as accounts payable, short-term loans, and accrued expenses. 3. Operating cycle: This is the time it takes for a company to convert its inventory into cash, such as the time it takes to purchase raw materials, manufacture and sell products, and collect payment from customers.  4. Cash conversion cycle: This is the time it takes for a company to convert its investments in inventory and accounts receivable into cash, minus the time it takes to pay off its accounts payable.  5. Net working capital: This is the difference between a company’s current assets and current liabilities, and it represents the amount of capital available for day-to-day operations. Significance of Adequate working capital: Adequate working capital is always best for the company. When a company approximately uses its assets, it can efficiently operate the business. The salary payments, daily expenses, or wage payments are never delayed and all the work is effective. Adequate working capital helps reduce the wastage of resources and benefits the goodwill of the company. What happens if working capital slips? For a business to function smoothly, it relies on its working capital. As cash flow is essential for any business to thrive and it serves as the lifeblood of the company. So, it is essential to have sufficient working capital to ensure continuous operations and growth. On the other hand, deficient working capital can lead to various challenges such as delayed payments of salaries and wages, difficulty in managing day-to-day operations, and other complications. To avoid such hindrances, it is crucial to maintain sufficient working capital. Collateral-Free Working Capital Funding In cases where a company urgently requires working capital, it can opt for collateral-free working capital funding. Terkar Capital recognizes the significance of efficient cash flow for businesses to thrive and operate seamlessly on a day-to-day basis. Thus, for companies that require working capital urgently, Terkar Capital is a perfect choice. During financial crises, we assist businesses in swiftly raising funds to meet their working capital needs through various collateral-free financing options such as NBFCs, equity capital, financial aid from relatives and acquaintances, applying for business grants, or seeking assistance from financial institutions.

Working Capital Finance – Overview Working capital finance helps businesses cover essential expenses like daily operations, raw material purchases, wages, utility bills, and payroll, rather than capital expenditures on equipment or machinery. It is especially beneficial for businesses with inconsistent cash flow or those in a growth phase, taking on larger projects. This type of financing provides the necessary liquidity to maintain smooth operations and seize new opportunities. The Role of Working Capital Generally working capital comes into the picture, whenever there is a gap between the debtors and creditors cycle. E.g., You’re the manufacturer of the X component used for 2-wheeler assembly. To manufacture this X component you need to purchase the raw material, and probably you need to pay upfront to buy the raw material. However, the conversion of that raw material to cash may take the time of 45 days. In this case, you need the working capital to bridge the gap between the purchase of raw materials and the sale of the finished products. Working Capital Flexibility It is a simple solution business take up that helps in keeping up with the work cycle. Working Capital is the difference between the company’s current assets and its current liability. It is one of the very flexible options to opt for as it proceeds with minimum documents in a short period. One can opt for a working capital loan in both secured and unsecured ways depending upon the availability of collateral. Working Capital Finance Cycle This term refers to the time it takes for a company to convert its net assets and liabilities into cash. A shorter working capital cycle is favourable as it allows businesses to unlock their cash more quickly. On the other hand, if the conversion process takes longer, there will be a higher need for working capital. Therefore, companies must strive for a shorter turnaround time to optimize their working capital requirements and ensure smoother cash flow. Therefore, it becomes imperative for businesses to focus on optimizing their working capital requirements through effective management of the working capital cycle. By doing so, they can ensure smoother cash flow and enhance their overall financial performance. Types of Working Capital There are various types of working capital loans available from which a business can select as per their requirement. Most banks offer similar types of Working Capital Loans. These are:  Overdraft Facility or Cash Credit Invoice Factoring Bill Discounting Letter of Credit Bank Guarantee Benefits of Working Capital Facility It can help businesses boost their day-to-day activities and meet the short-term requirements of the business. The businesses can eliminate the collateral and opt for an unsecured working capital loan as it is not always justified to put your assets at risk. This will eliminate the requirement for collateral and the business will be able to flourish in its operations. The procedure for getting a working capital loan is very flexible. So, you can easily apply at Terkar Capital to get the best solutions for funding. Thus, as a result, the process will get easier and funds will be disbursed faster. It helps you to maintain a good cash flow for the business. Thus it turns to result in strengthening the financials and gaining stability in the business whenever there is an unexpected requirement. It offers a very flexible and easy repayment option. Working capital also fulfils cash requirements in an emergency. So, it gives much-needed leverage to the business to take up the risks. Read more about the process of Working Capital Financing from the case study. Why Terkar Capital? Terkar Capital provides loans specifically designed for MSMEs to support their financial needs. However, working capital finance is a common solution offered by Terkar Capital, enabling businesses to cover day-to-day expenses like raw material purchases, wages, and bills. This type of financing bridges the gap between the purchase of raw materials and the sale of finished products, ensuring smooth operations. We offer both secured and unsecured working capital loans with minimal documentation requirements, allowing businesses to access funds quickly. FAQs on Working Capital Finance 1. What is the tenure in working capital finance? Working capital finance is a short-term loan. It is mainly used for managing the operational expenses of a business. Normally, the loans are offered for 12 months. So, the criteria depend upon the lender. Also the requirement of the borrower. 2. How much is the interest charged? The interest depends upon the amount of the funds, the creditability of the borrower, and the repayment history of the borrower. Hence, the interest differs from case to case and lender to lender. 3. Which working capital instruments do we offer? Terkar Capital arranges a variety of financial products in debt funding. We assist the clients in choosing the best suitable one. 4. How is the repayment criteria in working capital finance? The repayment criteria depend upon the mutually agreed terms and conditions between the buyer and the lender. It can be through EMIs or as and when the borrower gets cash. 5. Who provides a working capital finance facility? The banks, NBFCs, and financial institutions provide the working capital facilities. The eligibility, repayment terms and documentation vary according to the respective lenders. We help to bridge the gap between eligible borrowers and capable lenders.

What is LRD loan? LRD full-form lease rental discounting is a type of term loan. It is a type of secured debt funding that is offered based on the rental income of the property. The property must be leased for 5-10 years. And the lessee or tenant should be a well-known brand.Understanding What is an LRD Loan in India Overview – LRD Loans (Lease Rental Discounting) The leased properties can source you funds!! Yes, you read it correctly. The leased properties can, however, give you funds. It can be used for either expansion, purchase of assets, or paying off other loans. Such loans can be obtained through a debt product called Lease Rental Discounting (popularly known as LRD). Let us understand the LRD loan facility in detail. Benefits of LRD loan LRD loan serves as a multi-purpose loan and can use the funds for business expansion, financing for the purchase of an asset or new property, or paying off loans. The owner of the property does not have to pay the bank, but in return, the tenant of the property directly pays the bank the loan in the form of rental receipts through an escrow account every month. This facility gives a long-term solution to cash flow management as the lease/repayment is for longer tenures. The Rate of Interest in LRD depends upon the value of the property, repayment tenure, the credibility of the lessee, etc. LRD loan Eligibility There are no fixed criteria for eligibility, as it differs from institution to institution. Below is the most preferable one. 1. Age criteria: The applicant must be 21 years or above but not more than 60 years in the case of a salaried person and 65 years in the case of a self-employed person. 2. Criteria for Borrower: The borrower must possess a property which leased to a known brand or corporates. The loan has provided to salaried individuals, professionals or even self-employed. 3. Lease Agreement Period The lease agreement period is very critical. An important factor for taking a lease rental discounting loan from a bank or NBFC. The bank may or may not provide a loan if the lease period is less than 5 years. This loan is given to rented properties with leases of 5 to 10 years. 4. CIBIL score: LRD loan provides a loan to a borrower who has a creditworthy CIBIL score. CIBIL score and track record are the decisive factors for sanctioning or rejecting major loan applications. Pre-requisites to Lease Rental Discounting The following prerequisites should consider before applying for LRD Loan. a. Corporate Tenants: The tenant for the LRD loan should be financially fit to meet the obligations of the bank. That allows banks to ascertain whether or not future payments are likely to come. The banks only discount lease rentals belonging to renowned corporations or brands with a good credit rating. b. Longer repayment period: Secondly, the tenure of LRD is usually between five to seven years or can even go up to 10 years. Banks generally do not make short-term lease rental discounting loans. It is for this reason that the amount of loans and the repayment period is usually large. That is not possible to get paid off within small tenures. Thus, LRD holds larger tenures of repayment. c. Repayment Criteria For the repayment of the loan, an escrow account is created. There is the participation of two or more parties like the borrower, tenant, and banker. The tenant will ask to transfer their rent to this account. The EMIs will be withdrawn from the same. How is a Loan against Property different from Lease Rental Discounting? A loan against Property is the borrowing of a loan against the whole property as collateral and getting funds against the loan. LAP utilizes the higher amount of loan against the value of your property and can use the same for business purposes. Whereas, in the Lease Rental Discounting, you get only a certain amount of loan against the lease amount the lessee will pay. So, the loan is provided against future expected rentals which should have a fixed and regular rental receipt. Understand the LRD Funding Process through a case study. Process to avail LRD loan facility Why choose Terkar Capital? Lease Rental Discounting (LRD) is a financial product that enables individuals to obtain funds by leveraging their leased properties. The loan is offered based on the rental receipts of the property, with a lease period of 5-10 years and a well-known brand as the tenant. LRD loans provide flexibility for business expansion, asset purchase, or loan repayment, with the tenant directly paying the bank through an escrow account.

Overview: Collateral-based Funding for Business If you own a business, you might need funds to effectively guarantee the smooth operation and management of your business. Such funds can be raised by either opting for a secured loan or an unsecured loan. You may also need to offer collateral to approve the loan application. But what exactly is collateral-based funding for businesses? What is Collateral-based funding? Collateral-based funding refers to the process of securing a loan by offering assets or properties as collateral to the lender. This collateral acts as a form of protection for the lender, assuring that the loan will be repaid. A Collateral may take the form of real estate, inventory, or other kinds of assets. It depends on the purpose of the loan. By leveraging collateral, businesses can facilitate secured debt products that come with several advantages. Such as lower interest rates and more favourable terms. For Example – Let us suppose that Mr Raman owns a business. He needs a fund for expanding the same. He also owns a property that is registered in his name. In such a case, Mr Raman can use this property as security against the loan. Thus, He secures a loan against the property in this case. Types of collateral The following are the types of collateral used to avail funding: 1. Real Estate The borrowers maximally use real estate assets as collateral. Eg building, apartment, premises, flat, or bungalow. The land is also used commonly as collateral. 2. Equipment or Machinery The borrowers can, however, obtain loans against the equipment as well as machinery by keeping them as collateral against loans. 3. Inventory financing The manufacturing companies can have a crore of rupees in stock which has to be kept idle till the time it gets converted into cash. Also, the turnaround time for converting to cash is high. In such a case, the inventories can be kept as collateral for acquiring funds. 4. Invoices (unpaid) The unpaid invoices. i.e., the outstanding invoices are commonly used as collateral. In the cases of Bill discounting and Factoring, such invoices get discounts. So the fund availed against them. How does collateral-based funding work for businesses? To avail of a collateral-based or secured loan, one must possess a tangible and lawful asset such as a mortgage. So, Unregistered or unlawful assets are unlikely to get funding, as unsecured debt products do not require collateral for securing funds. Next is the valuation of the property, whether the property serves the purpose of the required amount. Since the volume of funds depends upon the value of the mortgage asset one cannot get funds beyond that. The loan has been given based on the fair market value of the property. The benefit of collateral-based funding Funding is given against the assets. It includes fixed and tangible assets like land, buildings, machinery, etc. Lower interest rates as compared to collateral-free loans. More flexible tenures and repayment options than regular loans. Faster approval process. Difference between Collateral and Security Collateral and security are distinct concepts. Collateral refers to any fixed or tangible asset, such as land, buildings, property, and machinery, which the borrower provides to the lender as security for the loan. The ownership of the mortgage asset remains with the lender until the borrower completes loan repayment. Whereas, security refers specifically to financial assets (such as stock shares). That is collateral against loans. These include bonds, futures, swaps, options, and stocks. Conclusion When seeking funding secured by collateral for your business, Terkar Capital stands as your dependable partner. We offer diverse financial instruments crafted to suit the unique requirements of our clients.  To ensure a comprehensive funding solution, we conduct a diligent evaluation of your financial SWOT analysis, business plans, industry trends, sales metrics, and credit scores. With Terkar Capital, you can rely on collateral-based funding that fosters the growth and success of your business. Get your Free CIBIL Score & Report instantly.

Debt Funding Overview For starting, expanding, or running a business, funds are of prime importance. These funds can be raised in two ways, debt funding and equity funding. Equity Funding is raising finances by selling the shares of a company. Moreover, debt financing occurs when a company borrows money to be paid back at a future date with interest. This is available in both secured and unsecured funding. The funds can be sourced through Banks, NBFCs, or Financial Institutions. However, there are certain myths and misconceptions associated with how to obtain debt funding. Below are a few of them: 1. Funding requires high collateral Traditionally, debt instruments are used to come up with collateral. But now it can be availed even without collaterals. The collateral-free unsecured loans may have more interest rates as compared to secured ones. In the case of secured funding, the amount of collateral and the amount of loan should match. Whereas, in the case of unsecured loans, the funds are even disbursed based on the credit score of the borrower and his relationship with his banker. 2. The process of funding takes a longer time The funding procedure depends upon various factors. The lender has to submit a variety of documents like KYC, financials, and specific documents. Even though the process looks lengthy, we arrange it as fast and quickly as possible. Now the clients do not have to wait for months for disbursement, it can be done in merely days. 3. The lower amount only financed The clients now can avail the higher number of finances too. The only restriction is eligibility. Once the client has a creditworthy score and fits into the eligibility criteria, the higher amounts can also be availed through both secured and unsecured ways.  4. The ROI is high in case of unsecured funding The ROI majorly depends upon the availability of collateral, CIBIL score, and other economic criteria. The higher the ROI, the greater will be the risk, and the lower the ROI, the lesser will be the risk. Hence, the ROI totally depends and changes from case to case. 5. Debt funding come up with heavy risk The loans used to be risky earlier. Today if you are doing it with the right lender, then there is no need to worry. We at Terkar Capital help to bridge the gap between eligible borrowers and capable lenders. We understand the need and requirements of the clients and work accordingly with arranging a quality and transparent procedure that vanishes the risk in funding. 6. Fewer products available in debt funding This is not the truth, as there are several debt products available in the market that one can opt for and avail of such services. There are conventional as well as non-conventional debt funding options. The products are chosen to depend upon the financials and credit scores of the clients. 7. No flexibility in funding The debt funding has flexible options to carry out. Also, many services provide smooth repayment options which makes the funding work hassle-free. 8. You cannot use mortgaged property or assets. Most borrowers worry whether they can or cannot use the mortgaged property. Moreover, the property for a mortgage is either a residential or commercial one, which can not keep vacant or unused. As long as the borrower does not default on his or her loan payment EMIs, he or she can absolutely use the mortgaged property. Understand the execution of Debt Syndication here. Why Choose Terkar Capital? We at Terkar Capital understand the customer’s needs, strengths, and weaknesses. Concerning the edges, we arrange appropriate financial instruments. Our trained executives will assist you in the entire procedure while applying for loans. Even after the disbursement of the loan, if the client faces any issues, we are available to help until the end of the tenure of the loan. We have expertise in the analysis of the market and offer a reasonable ROI to borrowers. So whenever it is raising finance, it’s Terkar Capital!!

Loans against property Myths It is a market full of endless possibilities where anything can happen at any time. When it comes to mortgage loans, one of the most significant finance options is a Loan against Property. However, since these loans do require collateral against them and have minimal eligibility criteria, the amount that can be availed as a personal loan is less as compared to what can be assisted from secured loans. In case you want considerably high funds, then taking a loan against property is a better alternative. But, most people cease availing of such loans because of some myths associated with it. However, there is no reason to worry. To reassure you further on this, here are 6 common loans against property myths. 1. You can only take loans against residential property Perhaps the most common myth among most borrowers is that you can take a loan against property only on residential properties. However, that is not the case. You can get a LAP for both, residential as well as commercial properties. In turn, you can use the LAP to acquire commercial or residential property or for lease rent discounting. 2. You require to have a high income Contrary to popular belief, you need not fall under the ‘high-income section’ to avail of a LAP. Most loan providers have set income eligibility for salaried as well as self-employed individuals to avail of this type of loan. However, as long as you can assure them of your loan repayment capability, it would not signify whether you earn a high income or not. 3. You have to pay high-interest rates Because of the escalating property prices these days and the consequently high amount availed as a loan, most people assume that the interest rates on a loan against property would also be high. However, one needs to know that LAP interest rates depend on several factors. These cover the amount that needs to be borrowed, loan tenure, type of property, valuation of your property, etc. As a result, the interest given by different loan providers differs. However, most loan providers allow a range of options to negotiate the interest rates on LAP depending on how much your credit score is and the estimated rate for the property. 4. You can’t use the property used for a mortgage Most borrowers worry that once they mortgage their property for a loan, they cannot utilize the property anymore. However, this is not valid at all. Yet after taking a loan against a particular property, the borrower can enjoy the complete right to use it. Usually, the property that most borrowers pledge for a loan is their residence or commercial shops that they use for doing their daily business. During the period of taking a loan against such properties, they worry about losing their residence or shop. However, there is no need to bother. As long as the borrower does not default on his or her loan payment EMIs, he/she can enjoy living in the house or use the shop that is mortgaged with the loan provider. 5. The approval process is stringent While availing of a personal loan is very simple, these days, availing of a LAP is likewise not much of a hassle. As long as the borrower matches the loan against property eligibility criteria laid down by the particular loan provider, he/she can easily avail of a loan. 6. Borrow loan amounting to the full value of property Normally, when you appeal for a LAP, your approval is denied due to several factors. One point to note is the current market value of the property. Once the bank or NBFC determines this, it comes at a sanction based on the loan-to-value ratio. The rate discriminates from lender to lender; you can avail anywhere between 75%-90% of the property’s value as a sanction. These were some of the loans against property myths. If you want to be conscious of the same in a detailed way, India’s best financial advisor, then Terkar Capital can help you. It does not just offer you an opportunity to compare loans from private/public sector banks but also supports you get the loan in a hassle-free manner. Loan Against Property Myths at a glance The loan against property is a secured loan that offers high funds and low interest rates as it requires collateral against the loan. However, many people avoid availing themselves of these loans due to various myths associated with them. The article suggests that these myths are baseless and should not deter individuals from considering loans against property as a viable option for fulfilling their financial needs. However, If you want to be conscious of the same in a detailed way, India’s leading financial advisor, Terkar Capital can help you. It does not just offer you an opportunity to compare loans from private/public sector banks but also supports you in getting the loan in a hassle-free manner.

Secured Funding Overview In this growing world, financial resources have become a necessity for individuals and businesses alike. Whether it’s to cover personal expenses or meet the financial requirements of a company, securing funds is crucial. However, many individuals and businesses may find themselves lacking personal funds or savings to fulfil these needs. This is where the concept of secured funding or financing comes into play. If we talk about a business, the need for finance can be for expansion, reconstruction or to pay the dues. At this moment the thought of funding comes into the picture. Now the funding can take two types, that are secured funding and unsecured funding. What does the term Secured Funding refer to? Secured funding (unlike unsecured funding) is a type of loan where the borrower has to keep collateral of assets or security against the loan. In case of default, the lender has the right to put the asset or security pledged on auction and recover the amount from it. The borrower here does not have personal liability for the loan. The tenure of loans offered in secured loans is high with a low Rate of interest. Thus, we at Terkar Capital make an easy process of securing finances for our clients. Our team of experts analyzes each aspect properly and works accordingly. Features The interest rates in secured funding are lower than in unsecured funding due to the presence of collateral. Client credit is not a compulsory criterion. Here, banks may or may not ask for a CIBIL score. In the case of secured funding, the borrower gets a loan even if its CIBIL score is less. The tenure of the loan can be both fixed and variable. The borrower has the option to extend the tenure of the loan. In case of default, the lender can recover the amount from the mortgaged asset. Disadvantage If the borrower even after the tenure of the loan is unable to pay off his loan amount, his CIBIL score is affected. However, this will also influence his future loans. In case of default, lenders’ companies will seize the asset. An auction will be conducted to recover the amount. So, the borrower will lose its assets, which may affect its business directly or indirectly. The procedure or time required for a loan is lengthy as the lender has to inspect many things right from assets information to borrowers’ business, etc. Heavy paperwork is another disadvantage of secured loans. Who can apply for Secured Financing? Businesses or corporates that have fixed assets and need money for expansion, reconstruction, undertaking new ventures, or paying dues can apply for secured funding. Eligibility The applicant should be a Resident of India. The age of the applicant should be between 18 to 60. The applicant should possess a fixed asset. Many times there are income-based eligibility criteria for loans but there are no such fixed structure criteria, it varies. The companies have to provide certain income statements or financial statements as per the requirement of the lender. Check out your CIBIL for free, Here. Why Terkar Capital? Terkar Capital is a financial services company in India, that offers hassle-free secured and unsecured business loans. Our company stands as a pinnacle of modernization and specialization in loan facilitation, prioritizing a deep understanding of borrowers’ needs, strengths, and weaknesses. Our dedicated team tirelessly strives to provide top-notch services tailored to your requirements. Whether you seek secured business loans to raise funds or tackle various business situations, Terkar Capital is your go-to solution. FAQs How does secured funding differ from unsecured funding? Secured funding demands collateral or assets as security for the loan, whereas unsecured funding operates without any collateral involvement. The presence of collateral security in secured funding generally results in lower interest rates. How does secured funding affect the borrower’s CIBIL score? Failure to repay a secured loan beyond its tenure negatively impacts a borrower’s CIBIL score. This adverse effect on their credit score can have long-term financial implications, potentially hindering their eligibility for future loans. What are the advantages of secured funding? It offers a lower rate of interest, may not strictly require a high credit score, and provides flexibility in choosing fixed or variable loan tenure.

1. What is project finance and how does it work? Project Finance involves long-term financing for industrial and infrastructure projects, as well as public services, using a limited recourse financial structure. In India, project finance caters to the funding needs of specific projects. It ensures that the project is considered secure once it is completed, and the generated revenue is utilized to repay the loan. Repayment in project financing depends on the project’s cash flow, while the project’s assets, rights, and interests serve as secondary collateral. 2. What are the characteristics of Project Finance? a. Non-recourse Financing b. Project Finance Documents c. Many Project Participants d. Capital-Intensive Projects e. Special Purpose Vehicle f. Revenue from the completed project used for Repayment a. Non-recourse Financing Non-recourse financing is one in which borrowers and shareholders of the borrower have no personal liability in case of monetary default. So, any recourse lender will be limited primarily or entirely to the project assets. It is if the project company defaults on the debt.   b. Project Finance Documents Project financing requires a detailed project report. So, It is a very important document to take the proposal ahead. c. Many Project Participants Project Finance in India is generally used for the long term. So, large-scaled and several project participants were involved. This is helpful for the smooth running of the project financing process. Financial institutions don’t want to be in a position where the failure of one project or one borrower is large enough to cause their failure. Thus, having several project participants is useful.   d. Capital-Intensive Projects Project financing involves large amounts of funding. It is generally used to fund major international development and infrastructure projects. Thus, it finances capital-intensive projects.    e. Special Purpose Vehicle The SPV checks the proceedings of the project. It also maintains a line of sight at the assets. Asset allocation proceeds after the completion of the project. It is regarding the Special Purpose Vehicle which monitors all the processes. f. Revenue from the completed project used for Repayment The cash flow generated in Project Financing is used for the repayment of the loan.   3. What is the importance of Project Financing? In the past few years, global interest in Project Financing as a tool for economic investment has increased. Project finance helps finance new investments. It is structuring the finance around the project’s cash flow and assets. Generally without any additional sponsor guarantees.  It also alleviates investment risk and raises finance at a relatively lower cost.  Thus, benefiting the sponsor and investor.  a. Retains Confidentiality b. Extending the debt capacity c. Free Cash Flow and no conflicts a. Retains Confidentiality Financing projects through Project Finance enables the sponsors to retain the confidentiality of vital information. It is regarding the project which gets finance. It helps them to keep up with the competitive market through competitive advantage. b. Extending the debt capacity The debt may not fall on one lending institution or investment firm due to the presence of multiple entities. So the debt capacity increases due to syndication in Project Financing.    c. Free Cash Flow and no conflicts Through Project financing, the fund provider manages the free cash flow. That is left over after paying the operational and maintenance expenses and other statutory payments. The project company has a finite life. It limits the project. There are usually no conflicts of interest between investors and the management of the company.    For a detailed discussion on Project funding for Indian Enterprises click here. 4. How do you get Project Finance in India? Step 1) Pre-Financing  a. Identification of the Project Plan b. Check and Minimise Risks c. Analyze the Project Feasibility a. Identification of the Project Plan In this stage, the lender primarily ensures that the project plan is aligned with the goals of the financial services company. This step includes identifying the strategic plan of the project and analyzing whether it’s reasonable or not.  b. Check and Minimise Risks The lender should check the risks involved in the project. Whether the project has resources to avoid any risks. So, risk management is essential before the lender begins the Project Financing venture.    c. Analyze the Project Feasibility When a lender decides to invest in a project, he should check if the project is financially and technically feasible. So, This can be done by analyzing several factors in the project.   Step 2) Financing  a. Arranging Finances b. Negotiation of the Loan c. Documents and Verification d. Disbursement of the Loan a. Arranging Finances Financing the Project is a crucial part. The sponsor should get a loan from a financial institution. Thus, those objectives and goals are in line with that of the project.    b. Negotiation of the Loan Negotiating is an important part of Project Financing. Thus, the lender and the borrower negotiate the funding until they reach a solid agreement.    c. Documents and Verification The lender and the borrower mutually decide the terms and conditions of the loan. So, once decided, the terms of the loan, then documentation takes place.    d. Disbursement of the Loan The borrower receives the funding after negotiation. Thus, The process should complete documentation too.    Step 3) Post-Financing a. Monitoring of the Project b. End of the project and Repayment a. Monitoring of the Project The project manager manages the project. So, he monitors it in a timely and organized manner.     b. End of the project and Repayment It is necessary to keep track of the cash flow from its operations. This is because of the funds from the cash flow. So, the revenue will be used to repay the project funding.