What is Loan Against Property?

Unlike an unsecured loan, loan against property (LAP) is a secured loan that is given by mortgaging a self-owned property (residential or commercial) with the lender. Typically, LAP is a loan that you can access against residential or commercial property including a house, flat/apartment, office, or a shop. To avail of a loan against property and acquire funding for your prospective business, you need to have a self-owned property with a clear and marketable title. Such a loan can be utilised in meeting business requirements such as the expansion of business, ploughing funds into the existing business to ensure growth, maintain steady cash flow, or even meet short term or emergency business needs. Such a loan helps a small business owner to remain in control of the business, unlike other investments in which lenders may seek to gain part control of the company. LAP is designed to meet such requirements of small businesses and remains one of the critical sources of financing for businesses.