Loan Against Property

Facility size	₹20–150 crore
Loan to value	55–70% commercial · 60–75% residential
Tenor	10–15 years
Indicative pricing	9.5–14% p.a., processing fees 0.5–2%
Lenders	Banks and NBFCs
Security	Mortgage of the property; you keep using it
Timeline	2–10 days for clean mandates; longer where title or valuation needs work

What LAP can fund

LAP is general-purpose secured money. Lenders will ask what it is for and write the end use into the sanction, but the permitted uses are broad.

• Business expansion. New capacity, a new plant, a new location, or the capex a bank will not fund as a clean term loan.
• Working capital. Funding a longer cash cycle, or replacing expensive short-term borrowing with long-tenor secured debt.
• Debt consolidation and refinance. Collapsing several costly facilities into one cheaper secured loan, and buying back headroom in the process.
• Project equity. The promoter's contribution to a project that is raising its own construction finance separately.
• Acquisition. Buying a business, a competitor, or a partner's stake, where the property provides the security the target cannot.

What lenders look at

Two assessments run in parallel: the property, and you. Lenders lend against the asset but get repaid from income, so a strong property with weak cash flows still gets declined.

• Property type and marketability. Self-occupied commercial and residential score best. Industrial, hospitality, and special-use assets attract lower LTV and fewer lenders.
• Title and chain of documents. A clean, unbroken chain of ownership. Gaps in the chain are the most common reason a LAP stalls.
• Valuation. The lender's panel valuer sets the number the loan is sized against, not the price you paid or expect.
• Occupancy and rental status. Vacant, self-occupied, or let out — each changes both the amount and the rate. A tenant on a long lease helps.
• Your company's cash flows. Audited profitability, existing debt, and coverage. This is what actually services the loan.
• Existing charges on the property. Any current mortgage, lien, or dispute, and whether the incumbent lender will release or share the security.

LAP vs other options

LAP is not always the right answer. If the property is leased, LRD is usually cheaper. If you need money in a week and are willing to pay for it, unsecured debt may be worth the premium. The honest comparison:

Loan against property	Wins when you own a clean, marketable asset and want the lowest cost over a long tenor. Largest amounts, cheapest rates, slowest of the three because of title and valuation work.
Unsecured business loan	Wins when there is no unencumbered property, when speed matters more than price, or when you do not want a mortgage on the family asset. Shorter tenors, higher pricing, and a personal guarantee from promoters.
Lease rental discounting	Wins when the property is already leased to a credible tenant. Repayment rides the rent through an escrow rather than business performance, so it is often the cheapest large-ticket money a property owner can raise.

In practice many companies run a combination: LRD on the leased asset, LAP on the self-occupied one, and a small unsecured line for timing gaps. The mistake is defaulting to whichever product your relationship bank happens to sell.

Documents you'll need

Two sets: the property and the financials. On LAP, the property file is what usually decides the timeline, so start collecting it first.

Property documents

• Title deed and the full chain of prior title documents
• Approved building plan
• Occupancy certificate, where applicable
• Latest property tax receipts
• Encumbrance certificate
• Lease deed and rent receipts, if the property is let out
• Existing sanction letter and no-objection, if the property is already mortgaged

Financial documents

• Audited financials, last three years
• Current-year provisional financials
• Income tax returns, last three years
• GST returns, last twelve months
• Bank statements, last twelve months
• Existing sanction letters and repayment track record
• KYC of the company and the promoters
• Promoter net-worth statement

How the process works

Five steps. The property work starts on day one rather than after a term sheet, because that is where the delays hide.

1. We understand the ask. What you own, what it is worth, what is already charged against it, what the money is for, and how fast you need it.
2. We check the property early. Title chain, approvals, occupancy, and existing charges. Property problems are what kill LAP deals, and they surface late if nobody looks in week one.
3. We approach the right lenders in parallel. Banks for pricing, NBFCs for speed and for property types banks avoid. Three to five at once, not one after another.
4. We compare indicative term sheets. LTV, rate, tenor, prepayment charges, and whether the rate is fixed or floating. On a fifteen-year facility, prepayment terms often matter more than the headline rate.
5. Valuation, diligence, sanction, disbursement. Panel valuation and legal diligence, credit approval, then documentation, creation of mortgage, and release of funds.

Common questions

Property pe business ke liye loan kaise le?

Commercial property par market value ka 55–70%, aur residential par 60–75% tak loan milta hai — tenor 10–15 saal, indicative rate 9.5–14% (July 2026). Title clear hona zaroori hai, aur lender aapki company ka cash flow bhi dekhta hai, kyunki repayment wahin se hoti hai. Property promoter ke naam par ho toh bhi chalta hai — owner ko co-borrower ya guarantor banana padta hai. Bank aur NBFC dono karte hain, isliye ek saath do-teen lenders se baat karni chahiye.

Can I get LAP on a property that already has a loan?

Yes, in two ways. The common route is a balance transfer with top-up: a new lender repays the existing facility and lends more against the same property, often at a better rate. The alternative is a second charge, which needs the first lender's written no-objection and is priced higher. Which one works depends on your outstanding balance against the property's current market value.

Does the property need to be in the company's name?

No. Promoter-owned or family-owned property is used routinely to raise debt for the operating company. The owner joins as co-borrower or guarantor and mortgages the asset, while the company is the borrower and services the loan. If the property sits in another group entity, that entity comes in as co-borrower. Lenders care about clean title and enforceability, not whose name is on it.

How is the property valued?

By a valuer on the lender's approved panel, who inspects the property and works off recent comparable transactions, circle rates, rental yields, and construction cost. On large tickets most lenders commission two valuations and lend against the lower one, not against your expectation. Location, title clarity, marketability, and current occupancy move the number more than the size of the building.

More on documents, timelines and costs is in the FAQ. If a bank has already declined the file, the practical routes are set out in alternatives after a bank rejection.

Pacewell Capital is a debt advisory and arranger, not a lender. All loans and facilities described here are provided by RBI-regulated banks, NBFCs, and funds, subject to their own credit approval, diligence, and documentation. Interest rates, loan-to-value ratios, and timelines stated on this page are indicative market ranges as of July 2026 and are not offers or commitments.