4 Things To Know Before Getting A Property-Backed Loan

property backed loan

What are property-backed loans?

Do you know that you can potentially free up working capital for your business if you own a local residential, commercial or industrial property? Property-backed loans are secured loans taken by pledging a local property as a form of collateral against the loan. The pledged local property can be owned by the companies and/or directors of the companies. 

Taking up a property-backed loan with Funding Societies will allow you to access funds of up to 80% of your property’s value. As you only need to pay monthly interests, you will be able to maximize the utilization of your cash throughout the loan. You generally will be able to obtain the lower interest rates as compared to an unsecured loan. The loan is applicable to all companies, regardless of size, which means that startups can also take up this loan. 

How does it work? 

Property backed How to Infographic

Who does this product benefit?

Wondering if you can potentially benefit from this product?
Here are some examples of how you can leverage on the property-backed loan:

  • You have built up a property portfolio over time and you have a business opportunity that you would like to pursue which will require a significant amount of working capital. 
  • You are yielding good rental returns on your property and you do not wish to sell the property.
  • You would like to hold on to your property as you foresee large capital gains in the long run. 
  • You are looking to free up more capital from your property via a remortgage with your existing financier. However, due to limitations in the total debt servicing ratio, you may not qualify for a remortgage.

What is the typical process?

  1. Our Relationship Managers will reach out to you to
    (i) Gather documents related to your business
    (ii) Get a valuation of your property
  2. Our credit team will then process your documents and provide advice on the net cash amount that you will free up after paying off any outstanding bank loans.
  3. Once you accept our loan offer, we will proceed to work on the paperwork with your existing financier and crowdfund the loan.
  4. Upon a successful round of crowdfunding, we will disburse the loan amount to you.

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