Business Loan Against Property — Rates, LTV & Tax

Commercial property pledged as security for a business loan

Who it suits

Business LAP, in one paragraph.

An established business with a large capital requirement and promoters holding property. Because the security is real and marketable, this prices several points below unsecured business credit and stretches over a far longer tenure — which materially reduces the pressure on monthly cash flow.

Businesses needing more than an unsecured facility will sanction.
Promoters holding clear-titled residential or commercial property.
Anyone consolidating several expensive short-tenure business debts.
Not suitable where repayment depends on an uncertain future event.

Key parameters

The numbers that shape the offer.

9–14% Indicative rate p.a., reducing balance

50–70% Loan-to-value against market value

Up to 15 yrs Tenure, the longest on the business menu

Indicative only, sourced from public lender information as of July 2026. Your actual rate, tenure and sanctioned amount are set by the lender based on your profile.

Eligibility & documents

What you need before you apply.

Most rejections at this stage are paperwork failures, not credit failures.

Eligibility criteria

Business vintage of 3 years with audited financials.
Clear and marketable title, free of existing charges.
Promoter age 21 to 65 at loan maturity.
Bureau score of 700+ and a serviceable debt service coverage ratio.
Lender-commissioned legal opinion and property valuation.

Documents required

Entity and promoter KYC, plus constitution documents.
Complete title chain, sale deed and encumbrance certificate.
Approved plan, occupancy certificate and latest tax receipt.
3 years of audited financials, ITRs and GST returns.
12 months of current-account statements.
A note on the proposed use of funds.

EMI calculator

See the monthly number before you commit.

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Loan amount ₹

₹5 lakh to ₹10 crore

Rate of interest (p.a.) %

8% to 18%. Property security prices well below unsecured

Loan tenure Yr

1 to 15 years

Monthly EMI ₹0

Principal: ₹0
Total interest: ₹0
Total payable: ₹0

Indicative only, on a reducing-balance basis. Excludes processing fees, insurance and statutory charges. KredExperts does not set rates; final terms come from the lender.

Business LAP FAQs

The questions that come up first.

How does this differ from a personal loan against property?

Mechanically they are close — the difference is the stated end use and how the file is underwritten. A business LAP is assessed on business cash flows and financials, and the interest may be treated as a business expense. A personal LAP is assessed on personal income.

Is the interest tax-deductible?

Where the borrowing is genuinely applied to business purposes, interest is generally allowable under Section 37(1) of the Income Tax Act, while principal repayment is not. Documenting the end use matters if the treatment is ever questioned. General information, not tax advice — confirm with your CA.

Can I pledge a residential property for a business loan?

Yes, and it is common. Residential security usually attracts a slightly better LTV and rate than commercial. The property can be owned by a promoter rather than the entity, with the owner joining as a co-borrower or guarantor.

What happens if the business fails?

The lender can enforce the security under the SARFAESI Act and sell the property. Pledging a family home for business credit deserves an explicit, pessimistic conversation before signing — not an optimistic one.

How long does it take?

Typically 3–5 weeks. The credit assessment is rarely the constraint; the title search, valuation and charge creation are. Having the full title chain and current-year financials ready is the single biggest accelerator.

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The cheapest business money — against the highest stakes.