NPA Funding by NBFC Companies
NPA Funding by an NBFC company plays a crucial role in the recovery journey of an NPA account borrower. As NBFC offers complete closure of NPA and lists the new loan as a standard, this opens the availability of conventional banking products/loans.
Resolving the NPA account could be the priority for borrowers as banks take legal actions and try to sell off the borrowers’ precious property to recover their loans. All this put immense pressure on the borrowers to run their business as well as to save properties from banks.
Borrowers are left with the options of selling their hard-earned properties or taking NPA funding from private lenders or NBFC’s. But again, private lenders charge high interest, which is not suitable for businesses already in stress.
So, the better solution is to take funds from NBFC companies and close the NPA accounts.
In the last few years, a lot of new-age NBFCs registered under the RBI that offer loans to close NPA accounts and are helpful in re-tracking the stressed businesses.
So, the businesses that have good collateral coverage and a genuine repayment plan can avail funds from these companies and revive their business & save their collateral.
Benefits of NPA funding by NBFCs Companies:
- Direct takeover of the NPA account from the bank
- Loan for closing NPA account and OTS (One Time Settlement)
- Payment made directly into the NPA account
- Direct transfer of securities/collateral
- Freedom from NPA Status
- Update in CIBIL Score
- A new repayment track record
- Can avail of facilities from other financial institutions
- A moratorium period can be given
- Additional funds can be provided
- A new repayment tenor
- Standard mortgage of collateral properties
Conclusion
Availing NPA funding through the NBFC companies can offer multiple benefits to the borrower, like saving their properties, revival of credit score, and the availability of working capital to run their business properly.
