Loan Against Property
Loan Against Property for Business
11 August 2026 · 5 min read
For established businesses with owned premises, a loan against property is often the lowest-cost growth capital available. It is also secured lending, which deserves careful thought.
Why LAP costs less
Security reduces the lender's risk, and pricing follows. Rates are materially lower than unsecured business loans, and tenures stretch far longer — commonly up to 15 years — which keeps the EMI light relative to the amount borrowed.
How much you can raise
- ✓Typically 50–70% of assessed market value, depending on property type
- ✓Residential property usually attracts the highest loan-to-value ratio
- ✓Commercial and industrial premises are accepted at lower ratios
- ✓Repayment capacity, not just property value, caps the final sanction
Risks to weigh honestly
Default puts the property at risk, and a long tenure means a long exposure. Borrow against a business plan with visible cash flows, not against optimism.
Check foreclosure and part-payment terms before signing. Floating-rate loans to individuals generally carry no foreclosure penalty, but terms vary — read them.
Frequently asked questions
›Can I use LAP funds for any business purpose?
Generally yes, subject to the end-use declaration in the sanction letter. Speculative use is excluded by most lenders.
Want this reviewed for your own case?
An Arthvritti advisor will look at your numbers and tell you what is realistic — including when borrowing is not the right move.
Check LAP eligibility