Property Advisory
Lease Rental Discounting — turn your lease into liquid capital.
For landlords of pre-leased commercial property — borrow against the rental cash flow itself, with the tenant's covenant underwriting the loan. Lower rate than LAP, longer tenure, no personal income stress.
What makes a strong LRD file
Tenant covenant
Investment-grade tenant — listed, PSU, MNC, established corporate or government. Weakest link is the file.
Lease structure
9+ years remaining tenure with lock-in; rent paid via banking channel with TDS compliance.
Property title
30-year title chain clean, encumbrance certificate clear, sanctioned plan and occupancy certificate in place.
Property type
Grade-A office, high-street retail, IT park or warehousing — most lenders avoid residential rental.
Location grade
Tier-1 and Tier-2 metros preferred; micro-market fundamentals matter for valuation.
Rent-to-value ratio
Gross yield of 6%*+ on property value improves LTV — sub-5% yields cap the eligible loan.
How we structure an LRD engagement
- Tenant covenant review — financials, sector, lease agreement
- Lease audit — lock-in, escalation, renewal, default clauses
- Property documentation & title verification (via independent advocate)
- Independent valuation commissioned if lender range is wide
- 3–4 lender offers compared on rate, LTV, tenure, foreclosure, default terms
- Sanction-to-disbursal coordination, post-disbursal servicing support
- Annual refinance review — LRD rates change with the yield curve
Indicative LRD economics
FAQ
Common questions
What kind of tenant qualifies for LRD?+
Lenders want investment-grade tenants — listed companies, PSU banks, MNCs, established Indian corporates or government departments. Lease tenure of 9+ years remaining (3+5+3 lock-in structure typical), rent paid via bank transfer with TDS compliance. Weaker tenant covenants (startups, single-location SMEs) significantly reduce LTV or disqualify the file.
How is the loan amount calculated in LRD?+
Typically 6–9 years of discounted rental cash flow, capped at 50–60% of property market value. Lenders compute net rent (gross less TDS, society dues, maintenance), discount it at their internal rate, and set the eligible loan. We model this with 3–4 lenders to surface the best quote.
What happens if the tenant vacates mid-tenure?+
Most LRD agreements have a substitution clause — you must replace the tenant with an equivalent covenant within 6–12 months, and the EMI continues from your other income. Some lenders offer a 6-month moratorium. We review the default clause carefully before signing.
Next step
Get your file reviewed before you apply again.
Share basic details — a senior advisor will read your profile, diagnose what's blocking approval, and tell you exactly what to fix first.
- No CIBIL pull until strategy is agreed
- No blind portal submissions
- Review by a senior advisor — not a call-centre agent
Explore further
Continue your funding readiness journey
Funding Readiness Assessment
Score your business against the 6 pillars lenders actually evaluate.
Why Loan Applications Get Rejected
The 8 silent killers behind approval failures — and how to fix each.
Tax Planning for Loan Eligibility
How ITR & GST decisions today decide your borrowing capacity tomorrow.
Business Loan vs LAP
Which structure actually fits your cash flow, risk and tenure.
Credit Profile Improvement
From low CIBIL or rejection to a fundable file — the structured way.