A brief on lease rental discounting (LRD)

A term loan when offered against rental receipts which are derived from lease contracts only with corporate tenants, it is called as Lease Rental Discounting (LRD). The lesser is provided a loan on the basis of the discounted value of the rentals and the underlying property value.

Generally, a property owner earns a fixed rental from their property investments at periodic intervals. But with Lease Rental Discounting Services, there is an opportunity to get these rentals in a lump sum manner and at an attractive discount rates. These funds can then be utilized to generate further assets, which can contribute to higher returns. These funds can also be utilized for the expansion of their business activities.

It is another method to obtain finance from bank or other financial and lending institutions. Lease Rent Discount (LRD) is contemplated between the borrower who owns the premises, the tenant who has rented the premises or taken on lease and the bank or financial institution or Corporate. The rent is considered as fixed income over a specified time which is also called as the lease period or the rent period or tenure. The agreement is between the borrower and lender and the major term of repayment is through the rent which is directly deposited with the lender and not with the borrower. The Borrower then credited a loan based upon this rent which is to be collected over the period of lease.

Documents Required for LRD

The borrower has to provide these documents to the banks or the financial institution while submitting the Lease Rent Discounting loan application form. Other documents may be demanded by the the lending institutions in post sanction phase or on periodical basis as required.

• Address Proof of the Individual/Partners /Directors – Latest Electricity /Telephone Bill or Maintenance Charge Receipt or Valid Passport or Voter’s Identity Card or Purchase/Lease Deed / Leave & License Agreement of Residence or Office Premise.
• Identity Proof – Valid Passport or PAN Card or Voter Card or any photo identification issued by the Government Agencies.
• Business Proof – Copy of Lease Agreement with the latest Rent paid Receipt, VAT or CST Registration certificate, or Permanent Registration Certificate.
• Partnership deed if it is a partnership firm.
• Certificate of incorporation, Date of Commencement of Business and Memorandum of Title Deeds.
• Trading, Profit & Loss A/c. and Balance Sheets (duly signed by a Chartered Accountant wherever applicable) of the previous 3 years.
• Bank statement of the Firm for the previous year.
• If existing loans are shown into the balance sheet, then sanctioning letter, repayment schedule and track record of the same.
• Firm/Company’s PAN Card.
• Last three year’s Individual income tax Returns of the Individual/Partners/Directors.
• Share Holding pattern of Directors duly certified by a Chartered Accountant where applicable.
• List of the Existing Directors from the Registrar of the Companies.
• Registered rent agreement copy with borrower who owns the premises and tenant who has rented the premises.

The corporations and individuals earn a significant portion of their income from rents that they derive from their immovable properties. As the financing needs of these people are different from majority of the population, the lease rental discounting was specially created to meet their needs.

Important Features and Benefits of Lease Rental Discount

• Loan tenor can be extended up to the lease tenure.
• Appealing Rate of Interest.
• Loan transfer from other banks along with the top up.
• Residential as well as commercial properties are recognised as collateral.
• Bare minimum and hassle free documentation.

Easy and advantage of doorstep service.

CONVERT YOUR RENT TO EMI!