What types of loans are available to real estate businesses?

Real estate companies in India have a variety of loans available. Most common will be term loans, to purchase or develop property, construction finance, to build, and a working capital loan, to do day-to-day business. When dealing with commercial property, businesses can also access a product called lease rental discounting, which allows them to raise funds based on future rental income and cash flow.

Project finance is also available for large scale developments. Working capital and overdraft facilities provide immediate (or near immediate) access to funds, as do line of credit facilities. Whether your company is eligible for one kind of finance or another depends on its business structure, strength, viability of the project and approvals from regulatory authorities. Documentation generally includes project reports, title deeds, approvals from local authority (if applicable) and financial statements. Some lenders can also provide tailored products, for affordable housing, commercial property or redevelopment. Be sure to compare the conditions/terms of each loan, interest rate, and repayment options before making your decision.

Government programs and public sector banks also provide loans for real estate businesses, which include commercial property loans with high limits and flexibility in tenure options. Lenders will have specialised products like lease rental discounting that will allow you to borrow against your rental income with repayment plans that will provide you with comfort. Some lenders will also provide loans for land acquisition, plot development and for renovation or retrofit projects. Before deciding on your loan you should always check if there are any pre-payment charges, insurance, or home guarantees, and whether there are legal clearances you need to obtain.