Best 3 Ways To Get OTS Funding
One-time settlement can be the best way to close one’s NPA account liability at a reduced value of the original outstanding amount by taking a waiver on interest & penalty levied by the bank. An OTS also helps banks to clean their balance sheet by reducing their NPA accounts, so it is largely supported by banks as well as other financial institutions. To Fund Your OTS Click Here A borrower can approach their bank to apply for OTS, and similarly, banks also offer time-to-time OTS schemes to their NPA accounts borrowers, and an OTS is approved by the bank for the borrower at a mutually favorable value. When an OTS is approved, it’s the borrower’s responsibility to service the OTS within the timeline. There are various ways to fund the OTS, like raising. OTS Funding OTS can be funded in many ways through debt finance, sale of collateral, and Private borrowing, depending upon the current income or business, collateral & most of the availability of such resources. 1. Debt Finance: OTS can be funded through a debt loan from a financial institution that understands NPA and OTS transactions and has such financial products to deliver OTS. They are able to cater to OTS transactions and have a deep understanding of the borrower’s legal & financial situations. These financial institutions provide funding for OTS from partial to full amounts of OTS as per the financial profile of the borrower and the valuation of underlying securities. This finance facility is available in all parts of India & a moratorium period can be given as a requirement, and the availability of funds. 2. Private Funding: An NPA borrower can take the help of a private funder/lender to fund their OTS. These private lenders are available on a local basis & can be accessed through local real estate agents who are in contact with private lenders. The best part of private funding is that it does not require any ratings and financial profile; they just need a collateral property, which must be located in their area of operations. Repayment can be done through monthly interest. 3. Sale of Collateral Property: The sale of collateral properties is also considered the best way to fund the OTS, and there is the majority of borrowers sell their collateral & complete their OTS Transactions. This can be done by obtaining permission from the existing OTS bank & whatever the amount comes from,this will be directly deposited into the bank to reduce the liability. A tripartite agreement is made between the Buyer, the Borrower, and the bank for the proper execution of the sale transaction. All the important terms & conditions are mentioned in this agreement which safeguards the rights of every member and also gives confidence to the buyer toward a transparent transaction.
Top 3 Ways to Fund an NPA Account
Getting funds for an NPA Account is very important for borrowers to maintain their business viability & to save their precious property from the sale activities of banks towards the recovery of the loan. When an account slips into NPA then as per policy all conventional banks & NBFCs do not extend any loan facility for borrowers. An NPA status is like a dead end for the borrower as the bank starts freezing their accounts and without the proper banking support, it is impossible to operate the business that faces difficulties in collecting payments from the clients or non-issuance of BG/LC facility. So closing the NPA account will be the topmost priority for the borrower but without proper banking support, it is nearly impossible to raise the funds to close the NPA account. So now, we will see who provides funds for the NPA account. Best 3 Ways to Fund an NPA Account 1. Term Loan: An NPA Borrower can apply for a term loan facility in NBFCs that is comfortable in extending a loan for NPA Accounts as these NBFCs are designed in such a way as to understand the complexity of NPA accounts. Their team can access the issues that push the client toward NPA and can understand the post-NPA legality like DRT & NCLT proceedings. They can also discuss with your previous banker to resolve the issue through their financial assistance and are capable of paying directly to them and also infusing the additional funds into the business. Click Here to fund your NPA Account 2. Private Lending: Private money lenders are also a good option for NPA borrowers as they provide finance only on the basis of market value of property not on the basis of ratings & financial eligibility of borrowers. Usually, private lenders fund 50% of the market valuation of property offered & follow a strict mortgage policy. 3. Business Partner: If the borrower has a good business model and has a high demand for the product that is capable of generating good profits, then he can seek out for business partner who can fund the NPA account & as well as infuse funds for the growth of the company. The client can put up an advertisement in the local business newspaper toward his requirement for a business partner and also take help of the business facilitators for the same. Conclusion: If an NPA borrower has a good-running business then he can apply for a term loan through some NBFC to fund the NPA account & can also raise additional funds for working capital requirements. And if you have additional collateral other than your factory/office & residence then private lending could be a good option. Lastly, if you have a good scalable business, you can also opt out of bringing a new partner into the company to fund the NPA. Click Here to fund your NPA Account
How to Convert NPA Account to Normal Account in 5 Simple Steps
NPA account is a term used for the NPA account borrowers. It never makes a business flourish and hinders its growth in many ways. NPA Borrowers can’t run the current accounts and no bank or NBFC extends any loan facilities to such borrowers. Above all, the bank’s legal process to recover the outstanding amount, like the possession & sale process of collateral, takes the borrower’s sleep away. Every NPA borrower tries to convert an NPA account to a normal account. However, the question arises of how to do this, as it seems to be one of the most difficult tasks in the financial market. But, there are certain ways through which an NPA borrower becomes standard. We evaluate the following ways as per the current market & banking policies to help you with your goal: Five Ways to Convert an NPA Account to a Normal Account 1. Restructure of NPA Account: This is one of the best ways to convert one’s NPA account to a normal account. The borrower can approach their bank & apply for restructuring of their loan. As per policy, a bank can reschedule the repayment tenor & also reschedule the EMIs. This may also include extending the loan tenure, reducing interest rates, or offering a moratorium period. In some cases, the bank also demands depositing some money to cover interest & penalties levied on that account to make it standard. The principal balance amount after recovering all the charges will be rescheduled for the coming years in EMIs. Through loan restructuring, banks may convert all non-fund-based facilities like bill discounting loans, bank guarantees, and LC, into term loans, while the fund base remains the same. Important Note: The bank/lender will evaluate the borrower’s repayment capacity before allowing restructuring. 2. Repaying the Entire Interest & Principal: In one order RBI(Reserve Bank of India) makes it clear that NPA classified accounts can only be upgraded to standard accounts by paying overdue interest along with the entire principal of the account. And if a borrower has multiple loan accounts with the bank, he needs to pay overdue interest along with the total principal in all loan accounts. So borrower needs to repay the total loan with interest in order to convert the NPA account to a normal account. Click Here To Refinance Your NPA Account 3. One Time Settlement(OTS): One-time settlement is a tool used by banks to reduce bad loans from their books by offering a lower amount to NPA borrowers under a settlement scheme, This encourages borrowers to pay huge outstanding amounts at reduced prices & in a lump sum manner to close the NPA account. Banks time to time, offer OTS schemes to NPA borrowers. In general, borrowers can also approach their banks for a one-time settlement scheme or OTS. In this way, they can close their NPA account at a reduced amount. 4. Selling the Collateral Property to Pay off the NPA: Borrowers can request their banks to allow them to liquidate the collateral properties in order to clear their NPA outstanding. This can be done under the OTS scheme or without OTS by clearing the total outstanding if his bank allows it. This can be done with the help of a tripartite agreement between the bank, borrower & property purchaser. This agreement safeguards the purchaser and gives them transparency on transactions. 5. Taking a Loan for clearing the NPA Account: Now, we understand that the only way to convert an NPA account to a normal account is by paying the complete outstanding. So, suppose a borrower does not have ample money or does not want to sell off their hard-earned properties to pay the bank. In that case, the solution is to take an NPA loan, or more precisely, refinance the existing NPA account from some other institution which are providing services for such a kind of NPA account finance facility. But finding such a type of company is a real headache, as today every financial consultant claims that they can arrange the finance for taking over the NPA account, but this is a total mess as they start searching & sharing your documents within their circle or in the open market. So it is advisable to look for a company which must have past experience in such transactions & is well knowledgeable on the subject. To my knowledge, there is a company known as “Fund Source India” to help you with this. They are well knowledgeable & have vast experience in financing the NPA accounts and clientele in all major cities. So, you can refinance and close your NPA account completely. How to Remove NPA from CIBIL? An NPA (Non-Performing Asset) account can negatively impact your credit report in CIBIL, making it challenging to secure loans in the future. To remove the NPA status from your CIBIL report, follow these steps: Conclusion By closing your NPA account completely by any means, like through your own funds, selling a property, or refinancing your NPA account with the help of an NPA Finance, you will be successfully able to convert your NPA account to a normal account, or you can regularize a NPA Account. Click Here To Refinance Your NPA Account
Learn Everything About Non Performing Assets
Every business requires capital at various stages for running & growing the business. So besides promoter capital businesses raise capital in the form of loans from the banks & NBFC. Businesses make a profit by infusing these loans in their business model in the shape of working capital limits or term loans for developing infrastructure or purchasing machinery. Banks also make a profit by selling loans to these businesses, so loans also called assets for the banks earn interest/profit for the bank. But what if these loans will not be repaid by borrowers/businesses? Banks categorized this irregularity in repayment in the following and also define these loans as Special Mention Accounts. Special Mention Account (SMA) refers to an account that exhibits signs of potential credit weakness or is at risk of becoming a non-performing asset (NPA). Special Mention Accounts are typically classified into three categories: SMA-0, SMA-1, and SMA-2. SMA-0 represents the lowest level of risk in which payment is overdue under 30 days SMA-1 indicates a moderate level of risk in which payment is overdue more than 30 days SMA-2 represents the highest level of risk in which payment is overdue more than 60 days But if a loan account goes beyond the capacity of Special Mention Accounts, that particular loan account is declared as Non Performing Asset(NPA). In such conditions, you can avail NPA Finance from Fund Source India to close your NPA Account and all legal litigations associated with it. NPA Full Form in Banking – The full form of NPA is Non Performing Assets What is Non Performing Assets? When a borrower defaults on his monthly repayments for more than three months or 90 days, then this stops generating income for the bank then the bank classifies this particular defaulted loan account as Non Performing Asset (NPA). NPA Meaning: More precisely, as per RBI(Reserve Bank of India) policy any account which defaulted on its repayment equivalent or more than 90 days, that account is considered a non performing asset. NPAs directly affect the financial health and stability of banks. When a loan’s assets become non performing(NPA), which leads to a decline in the bank’s profitability, asset quality, and capital adequacy. Higher levels of NPAs can weaken a bank’s balance sheet and effects its ability to lend and its ability to support economic growth. There are different types of NPA as per banking policies: Types of NPA: NPA accounts are categorized on the basis of their existence as NPA accounts or the duration for which they remain as NPA accounts. NPA accounts are categorized in the following terms/ways: What are the reasons for NPA :
NPA Finance: Common Challenges Faced by Borrowers and Lenders
However, here are some general issues related to Non-Performing Assets (NPA) finance or funding:
NPA One Time Settlement with the Bank NBFC
How to Came out of NPA Status Permanently Click Here to fund your NPA Account NPA account is like a nightmare, but it is sure that one can pass this night also. Best way to pass this nightmare, to get a loan or finance or Takeover of NPA account in some other lenders company. But, people feel financing their NPA as the most hard thing as they never dealt this kind of situation before and they are also new to Loan process for NPA account. But, we will let you know, how you can came out of this NPA Status Permanently. Kindly focus on the following point : OTS or One Time Settlement with the bank/NBFC is the beneficial for borrowerOTS can be applied directly, without any external helpOTS Financing or Outstanding NPA Finance is a possibilityNPA account finance works in a way like: Transfer of NPA Account in new lenders CompanyTakeover of NPA Account can be done in a registered company & under RBI ComplianceYou require a financial consultant to help you in this financing, because he knows about this market and have ready contacts for this.Choose a Financial Consultant who is well versed & knowledgeable on the subjectGive him complete clarity of your case & provide all documents & information requiredMost important ; Take this funding as Bridge FundingTaking this financing, borrower get rid of the NPA Status instantly, but cibil score is still an issueBut, Track record or repayment of this new loan will improve your cibil also. Usually, cibil updates on every quarter. So it will take around a year to improve cibil score.Good repayment with this new lender is also very helpfulSecond Round of Finance : Now, after a year try for second round of funding in some regular NBFC or BankImproved Cibil score is very helpful in this second round of financing, while good repayment schedule will give confidence to this lender or NBFC/Bank in giving approval.In this second round, you can also get working capital at some good rates and different financial products needed in businessNow at this stage, you are permanently free of all NPA issues. Click Here to fund your NPA Account
Case Study- Takeover of NPA Account from ARC Company
Here, we are sharing case study of one of our client located in Mumbai. Client was running a business of manufacturing high class TMT steel bars of 550D. Business started in year 2011 and they were really doing the good turnover of Rs.210 cr in year 2015 with good margins. They also availed loan facilities from SBI(State Bank of India) to the tune of Rs.18.50 cr which increases year on year to Rs.45 cr. This loan was secured by the way of their Residential house property, factory land & building and other current assets of company. Click Here to fund your ARC Loan Account In the year of 2016-2017, China started a dumping price war in India and breaks the price from Rs.50 to Rs.30. After this china raw material pressure, Indian government impose anti- dumping duty for five years, which is now extended for another five years. But due to this price war of almost two years, business of our client immensely affected, turnover crashed hugely, which swaps away margins and due to this client was unable to service the bank loan and which ultimately slips in to NPA Account or their loans turns in to NPA account. And bank increases the outstanding amount of our client to Rs.55 cr including interest & other charges. After government impose of anti –dumping duty, business of client again started rising from 2019 and by the end of year 2021, they regain their sales to Rs.125 cr. And in the meantime, in year 2020 one of the premium ARC(Asset Reconstruction Company) take their account directly from the bank at some reduced prices. So, ARC company approached our client for repayment of this loan at some reduced prices. Therefore a new loan agreement is signed between ARC & our client. Hence loan amount now reduced, this benefits our client but, again as per RBI guidelines account in ARC company is still considered NPA. So client was unable to transfer his loan to some regular bank as no bank can takeover a loan from ARC Company. Client wanted to do so because he was badly required working capital for his business as previously he managed the working capital for business from his family personal savings or assets and also wanted to came out this NPA Status, which unable them to excel in business. After lots of fail trials with lot of banks & NBFC’s, client approached us with intention to transfer his NPA Account & requirement of working capital . We at Fund Source India, analysed client business & terms with ARC company and ensure the client that, we can do this takeover of NPA Account and additionally able to arrange some working capital as business required some funds to be infused at that time. We introduced one of our NPA finance company and put up all case facts in such a way that they immediately shows interest in the proposal. We arrange a one to one meeting of both parties and terms & conditions decided between both and after due diligence of around 45 days, this new loan was disbursed. Benefits of this new loan to client :-: NPA Account is closed directly by new company through direct RTGSSecurity documents transferred directly to this new NPA Finance CompanyA new repayment for 5 years is given to clientMoratorium of six months was also givenFreedom of liquidation of assets towards repayment( if required)A new repayment track is createdUpdate & improvement in CIBIL ScoreNow client can easily move to other bank for further funding options
