EDELWEISS BANK

Lease Rental Discounting

Lease Rental Discounting (LRD) is one of the loan schemes offered by banks under which an applicant obtains loan against his/her leased property. Under LRD, the borrower pledges the future rental earnings from the leased property to the bank for loan repayment. LRD is typically offered against commercial properties.

LRD is particularly beneficial for the builders/developers who make a huge INVESTMENT in raising a commercial property for rent/lease purposes.• The INVESTMENTS of the builders are in a way locked as the returns are obtained only in the form of rentals. Thus, they opt for LRD from banks by pledging their future rentals from the property. Banks also ensure that the future rental earnings from the property are secured before offering LRD. The various factors that a bank keeps in mind while offering LRD are:
• Profile of the lessee.
• Credit worthiness of the lessee in terms of rent paying capacity.
• Location of the property with regards to factors such as growth prospects, presence of other industries, civic amenities, etc.
• One of the most important points that a bank keeps in mind is that in no way it should be facilitating the conversion of black MONEY into white through LRD.
The eligibility of the loan under LRD is calculated by taking 70-75% of the net rental income and dividing it by per lakh EM! of the tenure of left over years in the lease rent agreement. Banks normally open an Escrow account along with the applicant. The rental/lease income is credited into this account and EMIs are deducted pit of it.
Loan up to 60% of market value of property
Higher loan amount up to Rs 1O CRORE
Loan tenor up to 12 years
Attractive Interest Rates

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