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Case Study – Full Potential of Co-lateral

A Chennai based first generation manufacturer of Industrial Racks and Accessories was looking for expansion to the existing facility post brief period of positive cash flow. The additional fund requirement was ₹ 100 Lakh. Client feels he has got enough funding on the existing co-lateral and no further fund raising not possible without bringing on additional co-lateral.

The automated assessment model, analysed the optimum funding possible based on given co-lateral, existing rate of interest and the repayment capability. The solution was arrived by combining two products – Mortgage Loan and Business Loan. The model suggested one of the foreign banks which offers 100% finance on the co-lateral with significant lower rate of interest. Business Loan was suggested with 3 private sector bank offering competitive rate of interest.

The result is additional funding of ₹ 100 Lakh was arranged with weighted average rate of interest at 13.80%, a marginal increase from the existing rate of interest.