Did you know that the global Loan Against Securities (LAS) market is expected to be valued at a staggering $2 trillion by the end of 2023?
This figure is projected to experience a remarkable Compound Annual Growth Rate (CAGR) of 5.5% from 2023 to 2028. The surge in LAS popularity can be attributed to the growing demand for alternative financing options, the rising preference for asset-based lending, and the increasing need for liquidity in the business landscape.
However, amidst these opportunities, the LAS market faces its fair share of challenges, including a lack of awareness about LAS products, high costs, and regulatory uncertainties. Nevertheless, the LAS market also opens up exciting prospects, especially in catering to the needs of small and medium-sized businesses (SMBs), the rise of digital LAS platforms, and the growing focus on Environment, Social, and Governance (ESG) investing.
In this article, we will delve into the world of Loan Against Securities, exploring how it can nurture business growth and propel success in the corporate arena.
Understanding the Loans against Securities Market
The Loan Against Securities (LAS) market is a vital component of the global financial landscape, offering businesses an avenue to unlock the value of their investment portfolio while accessing much-needed liquidity. It enables borrowers to pledge their securities as collateral to obtain loans from financial institutions, effectively leveraging their assets to meet their financial requirements.
As the LAS market continues to expand, businesses of all sizes are increasingly turning to this innovative financing solution for multiple reasons.
Advantages of Loans against Securities for Businesses
- Unlocking Liquidity: One of the primary benefits of LAS is its ability to provide quick access to funds without selling off securities. This allows businesses to retain their investment positions and capitalise on potential future gains.
- Lower Interest Rates: Loan Against Securities typically offers lower interest rates compared to traditional business loans or unsecured credit, making it an attractive financing option for companies seeking cost-effective funding.
- Flexible Repayment Terms: LAS loans often come with flexible repayment terms, giving businesses the freedom to customize the loan structure according to their cash flow needs.
- Diverse Range of Securities: With the LAS market evolving, lenders now accept a wide array of securities as collateral, including equities, mutual funds, bonds, and more. This flexibility allows businesses to use their preferred securities while obtaining financing.
Challenges in the LAS Market:
While Loan Against Securities presents numerous advantages, it also faces certain challenges that hinder its widespread adoption and growth.
- Lack of Awareness: A significant obstacle for the LAS market is the lack of awareness among businesses about this financing option. Many companies may not be fully aware of the potential benefits that LAS can offer, leading them to opt for traditional loans.
- High Costs: LAS loans may come with associated costs such as processing fees, valuation charges, and margin requirements, which can deter some businesses from pursuing this financing route.
- Regulatory Uncertainty: The regulatory environment surrounding LAS can be complex, varying from one jurisdiction to another. Businesses may hesitate to participate in LAS due to concerns about compliance and legal complexities.
Opportunities in the LAS Market:
Despite the challenges, the Loan Against Securities market is poised to seize exciting opportunities that can further boost its growth and relevance in the financial landscape.
- SMBs Driving Demand: Small and medium-sized businesses are increasingly recognizing the value of LAS as a viable financing option. With the growth of the SMB sector, the demand for LAS is expected to rise significantly.
- Digital LAS Platforms: The rise of digitalization in the financial industry has led to the emergence of digital LAS platforms. These platforms streamline the LAS process, making it more accessible and user-friendly for businesses.
- ESG Investing Focus: As the global business landscape shifts towards sustainability and responsible investing, LAS lenders are exploring ways to align their offerings with Environmental, Social, and Governance (ESG) principles, attracting environmentally-conscious businesses.
At Rurash Financials, we empower consumers to leverage their securities for quick and secure financing. Pledge your equity shares, mutual fund investments, insurance, bonds, or other approved securities, and gain access to instant funding with a rate of interest as low as 9%.
With Rurash’s Loan Against Securities, you enjoy a plethora of benefits:
- Low-interest rates starting from 9%
- Pay interest only on the utilized loan amount, not the approved amount
- Continue earning on your pledged securities, such as interest, dividends, and bonuses throughout the loan term
- Quick approvals within 24 hours after opening the account and pledging securities
- No EMI burden, as the loan functions like an overdraft account with only monthly interest servicing
- Freedom to switch pledged securities with others from our extensive list of 800+ approved securities
- No prepayment charges or lock-in period
- Simple and Convenient Process
Our process is designed for your ease and convenience:
- Quick online application with easy documentation
- Dedicated Relationship Manager to assist you throughout the process
- Multiple lender options for competitive terms
- We cater to loans against securities amounts ranging from Rs 10 lacs to 100 Crores, catering to varying financing needs