Future Finserv
Lease Rental Discounting
Lease Rental Discounting (LRD)Â allows property owners to obtain loans using their rental income as collateral, providing immediate funds without selling the property.Â
At Future Finserv, we understand the unique requirement of our clients. We are here to help you and get your loan – hassle free.
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How it works
Suppose you own a commercial property that generates rental income. For instance, Mr. Ravi owns an office building in Cochin, which he has rented out to a tech company for 10 years. The tech company agrees to pay him a monthly rent of ₹5 lakhs for using the building.
Mr. Ravi needs immediate funds for a new business venture but doesn’t want to sell his office building. In this scenario, LRD comes into play. Instead of waiting for the entire ₹6 crore rent (₹5 lakhs per month for 120 months) over 10 years, he can access a significant portion of it upfront.
A bank or financial institution evaluates the property’s rental cash flow and stability. Based on this assessment, they offer Mr. Ravi a loan amount (let’s say ₹3.5 crores) upfront. In exchange, the tech company tenant deposits the monthly rent directly into an escrow account opened with the bank, bypassing Mr. Ravi.
In summary, LRD allows property owners to unlock the financial potential of their rental income by providing immediate funds in exchange for rent receivables. It’s a unique way to leverage real estate assets without selling the property. If you have any more questions or need further assistance, feel free to ask!
Get a Loan Today. Easy & Hassle-Free!
Get a loan today with Future Finserv – it’s easy and hassle-free! Enjoy quick approvals and flexible terms tailored to your needs.