Lease Rental Discounting (LRD) is a term financial service offered against rental receipts derived from lease contracts with corporate tenants. The financial service is provided to the lesser based on the discounted value of the rentals and the underlying property value.
The rent is considered as fixed income over a stipulated time i.e. Lease or rent period or tenure. The agreement is between the borrower and lender and the major term of repayment is the rent which is directly deposited with the lender and not with the borrower.
Consider the potential benefits and implications of offering lease rental discounts to maximize your property's earning potential while also meeting the needs of prospective tenants.
The Borrower is sanctioned a financial service based upon the rent to be collected over the period of lease. Not everyone who has given their property on rent can enter into a lease rental discounting agreement.
These agreements can only be entered into if the tenants are corporates and the lease period should be for a longer period. The maximum tenure can be for 10 years. Also 50-65 % of your property value can be funded depending on the bank you choose. The strict requirements linked to these agreements are intended to create a reliable and long-term relationship among all parties included.
The owner of the property does not make a payment to the bank but in return, the tenant of the property directly pays the bank in the form of rent every month through an escrow account. So, there is a direct payment of the amount and less chaos is created.
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