Loan Against Property vs. Business Loan — Which One Works Best for You?

When your business needs funds, the two most common options are Loan Against Property (LAP) and a Business Loan.

Both serve the same goal — growth — but the way they help you achieve it is quite different.

Let’s explore how each works and which one may be right for you.

Loan Against Property (LAP): Turning Your Assets into Opportunities

Your property isn’t just a place — it’s an asset that can open doors to business growth.

With LAP, you can leverage your owned property (residential, commercial, or industrial) to get a high-value loan at competitive interest rates.

Key Benefits:

• Lower Interest Rates: Because it’s a secured loan, you enjoy better rates.
• Higher Loan Amounts: Based on your property’s value, you can get up to ₹50 Cr or more.
• Longer Tenure: Repay comfortably over 10–15 years.
• Flexible Usage: Fund your business, consolidate debts, or even meet personal financial needs.

Best For: Established businesses or individuals who own property and need a large sum for long-term goals.

Business Loan: Quick Capital, No Collateral

If you don’t want to pledge property or need immediate working capital, a Business Loan is the ideal choice.

These are unsecured, meaning you get quick access to funds purely based on your financials and credit profile.

Key Benefits:

• No Collateral Needed: Ideal for startups or asset-light businesses.
• Fast Processing: Quick approval and disbursal.
• Short Tenure Flexibility: Perfect for immediate or short-term business needs.
• Builds Credit History: Helps improve your business’s financial credibility.

Best For: Growing companies that value speed, simplicity, and flexibility.

Which One Should You Choose?

Factor	Loan Against Property (LAP)	Business Loan
Collateral	Required (property)	Not required
Interest Rate	Lower	Slightly higher
Loan Amount	Higher	Moderate
Tenure	Long-term	Short to medium
Processing Time	Moderate	Fast
Best For	Long-term expansion	Short-term working capital

Our Recommendation

If you need a large amount at a lower interest rate, LAP is your go-to.

But if you value speed and flexibility, a Business Loan will serve you better.

At PennyFarm Finance, we don’t believe in “one-size-fits-all.” Our team studies your business, goals, and repayment capacity to recommend the most effective financing solution — whether secured or unsecured.