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.
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.
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
Easy and advantage of doorstep service.