Business Loans

Tips And Tricks To Attain Business Loans Secured Against Property

A secured business loan is a loan availed for fund requirements placed by business purposes that is secured by an asset, in this case, a property owned by the borrower. Usually, the collateral is in the form of commercial or residential property and in the circumstances wherein you are unable to pay back the business loan secured against property; your asset will be utilised by the lending organisation to cover your debt. Your business loan lender will ultimately sell your pledged asset to use the cash flow provided through the sale to cover your outstanding debt if you fail to honour your repayment schedule. To reduce the risk of defaulting on the repayment schedule of any loan, the borrower must use an EMI calculator for LAP which will provide him or her with a detailed structure of the repayment schedule coupled with pictorial representation of the total principal and interest amount that has to be paid off on a monthly basis in accordance with the terms and conditions stated by the bank or financial institution.

This might sound like a high-risk option, it can be, but the array of distinct benefits offered is undeniable. Undoubtedly, business loans secured against property compared to bad credit loans are much better, the loan is supported by your assets, therefore you have much greater borrowing power as the lender is assuming a lower level of risk. This implies that a secured business loan will allow you to access larger loan amounts with lower rate of interest and flexible loan repayment schedules. An EMI calculator for LAP can assist you in planning out your financial future better and simultaneously save you from the maths. Determining equated monthly instalments through an EMI calculator is a walk on rose bed amongst all other means of determining EMIs, though you need to be a little careful with where you’re stepping. The only thing that one has to do is feed in the following information in the calculator:

  • Principal loan amount.

  • Rate of Interest

  • Tenure of the Loan

  • Processing fee (if any).

  • Rough Estimate of Monthly Business Profit

Once you enter this information, the calculator will immediately screen your monthly EMIs liability for your specific loan scheme. Variegated banks may offer varied EMI calculators for LAP but the key factors that you have to feed in remain the same.

If you use the excel spreadsheet or the mathematical formula for the calculation of your business loans secured against property EMIs, it is essential to acquaint yourself with three odd variables which include the rate of interest, the value of the loan or present value and the number of periods. You can further calculate it manually by utilising the following formula:

EMI = [P x R (1+R) N]/ [(1+R) N-1]

Where P stands for the principal or loan amount taken, R for the rate of interest and N for the repayment tenure of the loan.

An EMI calculator for LAP has been proven to be useful for the borrower in numerous ways. Following are the major benefits offered by it:

  • It assists the borrower in getting the exact amount of their equated monthly instalments in regard to the loan scheme that they have opted for.
  • It helps them to plan out their detailed monthly budget and set their variegated other financial aspirations as they get to know how much money out of their monthly income would be spent as monthly EMIs.
  • The calculator also provides the borrower with a detailed breakup of their total payment procedure. It will provide them with the loan amortisation table which includes the amount of money they have paid so far and the amount that remains.

Following are the important factors that affect the EMI Calculator for LAP:

  • Rate of Interest Offered by the Bank: The rate of interest of the mortgaged loan plays an important character in the repayment amount. The rate of interest is directly proportional to the repayment amount. Higher the rate of interest, the higher the repayment amount. Initially, when the loan repayment tenure begins the interest amount is much higher than the principal amount, a 90:10 ratio, which implies that for the first few instalments, a huge chunk of the EMI is the interest amount. As the tenure progresses, the principal amount increases, and the interest amount decreases.
  • Repayment Tenure of the loan: The repayment tenure is also directly proportional to the interest rate. The shorter the repayment tenure of the loan, the lesser will be the interest rate, which implies that the amount to be repaid will be less, but if the tenure is shorter, the monthly instalments to be paid will be higher.
  • The Loaned-Out Amount: The higher the loan amount, the more likely it is for the EMI amount to be high as well.


Before putting up an asset at stake the business owner must ensure that his or her monthly business profit is greater than the summation of the interest and principal amount that one has to pay as equated monthly instalments. Therefore, he must utilise the mathematical tool of EMI Calculator for LAP available online and budgeting his finances in times to come accordingly, before taking up a business loan secured against property.


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