What is Lease Rental Discounting or LRD?
LRD or Lease Rental Discounting is a term loan provided against receipts derived from lease contracts with tenants. The loan is provided to the lessor based on the discounted value of the rentals as well as the inherent property value. It’s another process to obtain finance from a bank or other financial institute or institutes that are committing. Lease Rent Discount consideration is between the debtor that own the premises, the tenant who has leased the said premises or taken on lease as well as the bank or financial institute or Corporate Enterprise. The rent is considered as fixed income over a stipulated time called Lease period or duration of lease agreement.
The agreement is between the lender and borrower and the significant term of repayment would be the rent that is directly deposited with the lender and not with the debtor. The Borrower is sanctioned a loan based upon the rent to be accumulated over the period of lease.
List of Documents for LRD
The borrowers have to supply the following documents to banks or a financial institution or financing institution whilst submitting the Lease Rent Discounting loan application. Certain documents can be demanded from the bank or the lending institutions in place sanction phase or on periodical basis.
Some of the key documents are as below:
Address Evidence of the Individual/Partners /Directors:
Latest Electricity /Telephone Invoice or Receipt of Maintenance Fees or valid passport or Voter’s Identity Card or Purchase/Lease Deed / Leave & License Agreement of Residence or Office Premises Identity Proof: Valid Passport, PAN Card, Voter’s Card,
Any other photo identification issued by government agencies Business Proof: VAT/CST Registration Certificate Permanent Registration Certificate or Warehouse Receipts or Shop &
Establishment Act Certificate or Copy of Lease Agreement along with the latest Rent paid Receipt.
Business Profile on Company’s Letterhead
Partnership deed in case of partnership firms
Certificate of incorporation, Date of Commencement of Business and Memorandum of Title Deeds, Form 32 accountable for Addition or Deletion of Directors
in case of businesses
Last Few Years Trading, Profit & Loss A/c. And Balance Sheets
Last one year’s Bank transactions note
Business present loans have been shown in the balance sheet, then sanctioning letter, repayment schedule and track record of the same
Firm/Company’s PAN Cards Individual income tax thirds of the Individual/Partners/Directors to last few years
Last one year’s Bank announcement of Individuals,
Partners, and Directors Share Holding pattern of Directors duly certified by a Chartered Accountant
List of the Existing Directors of the business from the Registrar of the Companies
Registered rent agreement copy with debtor that owns the assumptions and tenant that has leased the said premises
And any other documents as required based on case to case basis
FAQs on (LRD) Lease Rental Discounting
How much finance can I avail against the property value?
One could borrow between 50-90 percent of the market value of your property subject to your income eligibility and other supported documents.
I don’t have documented financials but I do possess the repayment capacity, will I get a loan?
Your eligibility is calculated on the basis of the leases that you get from the property.
For how long a period could I get loan?
We help arrange Lease Rent Discounting (LRD) from minimum 3 years to maximum 15 yrs. The term for the loan will be limited to the retirement age or 60 years at loan maturity for midsize Clients and 65 years for self-employed clients.
Do I require a co-applicant?
Yes. All of the co-owners of your property might need to register as co-applicants. For a sole property owner or applicant, one adult member in the family shall need to register as a co-applicant.
In case of partnership firm or a business, partners and promoter directors correspondingly will need to be co-applicants.
What is the underlined security for LRD?
Rent is payable by directly into escrow account with sanctioned financial institution. The Inherent leased property, which can be commercial or residential building property, will be taken as collateral security.
What’s the applicable rate of interest?
The interest rate varies depending upon your loan amount, property type, lessee profile, Rental revenue etc and we at Redwood Syndicate assist in getting the best rate in the market based on your profile analysis.
Do I’ve the option of pre-paying the entire amount of the loan?
Yes. You May pre-pay the loan at any given moment after six months from the date of final disbursement of the loan. Foreclosure charges will be levied as applicable. This is true with most of the lending institutions.
How can we contact you to help us get LRD?
You just call us or send an email to: email@example.com our consultant will meet you and assist in availing LRD with best rates and terms.
Lease Rental Discounting or LRD in Whitefield, Bangalore