Private finance for NON-PERFORMING ASSET

Private finance for NON-PERFORMING ASSET

Private finance for NON-PERFORMING ASSET

July 29, 2022 POST 0
Private finance for NON-PERFORMING ASSET

BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) are exclusively giving advisory & work for Private finance for NON-PERFORMING ASSET

Having deep root in finance, BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) are looking forward for following deals:-

NPA Case Funding

BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) is India’s No.1 NPA Finance Company with Proven Track Record. BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) are exclusively working for NPA Segment, whether you can say it as NPA Retrieval, Loan for NPA, NPA Solutions, NPA Takeover, Finance for NPA Loan, Finance facility for NPA accounts, Transfer of NPA accounts, OTS funding in India, OTS Finance, OTS Funding.

BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) will help you in transferring your NPA account to one of our Lender Companies (which are registered under RBI and SEBI).

What is NPA Account: Non-Performing Asset?

When a loan account in a bank stop yielding/making a profit to the bank, or when a borrower of a particular loan account stops repayments or EMI more than or equivalent three months, then bank declares that particular account as an NPA or Non-performing account.

What happens when your company`s account is NPA? Or what are the consequences faced by the NPA Account holder?

Bank / NBFC suspends all the fund or non-fund-based limits of the borrower and starts adjusting the money deposited in that particular account towards their penalties, charges & Interest payments. Problem in maintaining an account with other banks, as the bank starts interfering with your other bank operations as Well. As the bank is recalling their entire loan, so they don’t extend any further loan facilities to the borrower. The borrower will face difficulty in procuring a loan from other banks & NBFCs because as per the policies, the NPA client is not eligible for any other loans & related facilities. Bank starts the legal procedure for recovery of its loan under SARFAESI Act, 2002, so their attitude towards the borrower becomes arrogant & they start legal procedure which distracts the focus of borrower from business to fight legal situations. At some later stages, the bank starts taking symbolic as Well as physical possession of the collateral under SARFAESI ACT, 2002 and if the borrower’s business properties are engaged, then the business & unit completely shuts down. Properties engaged in loans will lose their market reputation as bank proceedings put ups a notice on the mortgaged properties and later auction process greatly deteriorates the market value of the same.

In the last, as no other bank or NBFC funds an NPA account, taking a loan from the market and repaying the NPA account becomes very difficult for the borrower.

What are the Legal Notices Banks can issue to NPA Account Holders? or What banks will do legally, when someone becomes an NPA?

Loan Recall Notice: This is the outstanding loan amount recall notice issued by the bank after the declaration of the account as an NPA account. This notice orders to repay the entire outstanding loan amount to the bank in a particular given time period. This is an alarming stage for the borrower.

Notice 13(2): This notice can be issued by the Bank under SARFAESI Act, 2002 after said demand notice. This notice notifies the total outstanding amount with the bank & gives a total of sixty days for the repayment. This is the stage where the borrower needs to resolve this issue at his best.

Notice 13(4): This notice, commonly known as “Symbolic possession Notice” can be issued by the Bank under SARFAESI Act, 2002 after the above 13(2) notices. Through this notice, the bank notifies the borrower, that particular mentioned assets/properties will now legally belongs to them & the bank will proceed to take physical possession of the asset/property or do the legal proceedings like an auction of assets to recover the outstanding loan amount.

What are the options available to the borrower after being NPA?

Restructure of NPA Account Legal Solutions

OTS or One Time Settlement Refinance of NPA Account

Paying Loan through the sale of Collateral What are your rights if you can’t repay a loan?

Right to ample notice- Banks have to follow process and give you time to repay dues before repossessing your assets to realize the arrears.

Right to ensure fair value- The borrower can object if the property is undervalued. He can justify his objection by conveying any better offer that he may have so that the bank can make a decision

Realize balance proceeds – After recovering the dues and all expenses of conducting the auction, the bank has to refund the amount to the borrower.

Right to be heard- During the notice period, borrower can make representation to the authorized officer and put forth objections to the repossession notice.

Right to humane treatment – Lenders are required to respect borrowers’ privacy during these visits and ensure civil and decent behavior.

NPA Account Takeover

BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) are specially dedicated for clients who are under Stress or NPA accounts and facing legal issues with bank, now seeking finance to came out of NPA Status or Stress situation and to further excel in their businesses.

BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) are exclusively working for Private Finance for NPA Accounts (NON- PERFORMING ASSET), NPA Funding, Loan for NPA Accounts, NPA Case Funding, NPA Loan Settlement, NPA Account Takeover, NPA Retrieval, NPA Recovery, NPA Structuring, NPA Solutions, Loan for One Time Settlement, Stress Account/Loan against Property with bad CIBIL score, Builder Finance, Private Equity, Loan for NPA Accounts, Big Corporate Funding, ECB.


NPA Finance or NPA Funding or NPA Account Takeover OTS Finance

Can serve the Clients under DRT court or NCLT proceedings Can serve clients with property under bank possession

Also Serving SMA1 & SMA2 clients

Real Estate Finance for Builders & Developers

Corporate Finance -Big Ticket size Transactions with single or multiple products Can help the clients for getting OTS from bank or One Time Settlement

Loan for NPA Accounts

What is a Non-Performing Asset?

A non-performing asset (NPA) is a classification used by financial institutions for loans and advances on which the principal is past due and on which no interest payments have been made for a period of time. In general, loans become

NPAs when they are outstanding for 90 days or more, though some lenders use a shorter window in considering a loan or advance past due.

A loan is classified as a non-performing asset when it is not being repaid by the borrower. It results in the asset no longer generating income for the lender or bank because the interest is not being paid by the borrower. In such a case, the loan is considered “in arrears.”

Sub-Loan for Non-Performing Assets (NPAs)

Lenders usually provide a grace period before classifying an asset as non-performing. Afterward, the lender or bank will categorize the NPA into one of the following sub-categories:

  1. Standard Assets

They are NPAs that have been past due for anywhere from 90 days to 12 months, with a normal risk level.

  • Sub-Standard Assets

They are NPAs that have been past due for more than 12 months. They have a significantly higher risk level, combined with a borrower that has less than ideal credit. Banks usually assign a haircut (reduction in market value) to such NPAs because they are less certain that the borrower will eventually repay the full amount.

  • Doubtful Debts

Non-performing assets in the doubtful debts category have been past due for at least 18 months. Banks generally have serious doubts that the borrower will ever repay the full loan. This class of NPA seriously affects the bank’s own risk profile.

  • Loss Assets

These are non-performing assets with an extended period of non-payment. With this class, banks are forced to accept that the loan will never be repaid, and must record a loss on their balance sheet. The entire amount of the loan must be written off completely.

How NPAs Work

Loans, as addressed above, are not switched into the NPA category until a considerable period of non-payment has passed. Lenders consider all of the factors that may make a borrower late on making interest and principal payments and extend a grace period. After a month or so, banks typically consider a loan overdue. It is not until the end of the grace period (typically, 90 days of non-payment) that the loan then becomes a non-performing asset. Banks may attempt to collect the outstanding debt by foreclosing on whatever property or asset has been used to secure the loan. For example, if an individual takes out a second mortgage and that loan becomes an NPA, the bank will generally send notice of foreclosure on the home because it is being used as collateral for the loan.

Significance of NPAs

It is important for both the borrower and the lender to be aware of performing versus non-performing assets. For the borrower, if the asset is non-performing and interest payments are not made, it can negatively affect their credit and growth possibilities. It will then hamper their ability to obtain future borrowing. For the bank or lender, interest earned on loans acts as a main source of income. Therefore, non-performing assets will negatively affect their ability to generate adequate income and thus, their overall profitability. It is important for banks to keep track of their non-performing assets because too many NPAs will adversely affect their liquidity and growth abilities. Non-performing assets can be manageable, but it depends on how many there are and how far they are past due. In the short term, most banks can take on a fair amount of NPAs. However, if the volume of NPAs continues to build over a period of time, it threatens the financial health and future success of the lender.

Related Readings

Thank you for reading CFI’s guide to Non-Performing Asset. To keep learning and developing your knowledge of financial analysis, BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) highly recommend the additional CFI resources below:

Private Funding – (Private finance for NON-PERFORMING ASSET)

Private funding is where customers receive loans from private investors, solicitors’ funds, boutique lending firms and the like. Funds are usually pooled by the fund manager from individuals or institutions that want a higher return on investment and usually have a higher risk appetite.

How does it work?

Private loans are generally short-term in nature i.e. 3-12 months, are reserved for commercial entity borrowers / commercial purposes, and rely on a defined exit strategy to pay out the loan, such as:

Sale of assets Refinance Cash flow

Serviceability is not always required, because one of the features of private funding is the full capitalization of fees and interest into the loan (where possible). Then the full amount (principal plus interest and fees) is paid out at the end of the term as a lump sum. Interest and fees are usually more expensive than mainstream lenders due to the higher risk associated with this type of lending.

What are some reasons private loans are used?

For some, private lending is the only avenue left for them to be able to access funding, and this might be for several reasons such as: Mainstream banks may not have any appetite for the proposed use of the funds – e.g. development / construction lending has really slowed due to mainstream lenders holding back in this area. This has led to many property developers not being able to access funding to start / finish their projects. Therefore the higher rates and fees become incidental as the primary focus is to complete a project and collect the profits.

Unforeseen business events – sometimes, things happen in business which create a credit file, account behavior or cash flow issue which cannot be overlooked by mainstream commercial lenders.

Quick access to funding – some private lenders can turnaround applications and settlement within a Week. This becomes vital where a property settlement is due imminently and / or a rescission notice has been issued. It can also provide for agility and enable the snatching up of a great deal.

Debt consolidation – payout of ATO debts or potentially hostile creditors is often another reason private loans are taken. The above are just a few scenarios that may require private funding. However if you think you or someone you know have a similar situation or are unsure of what your options are, feel free to reach out. The important thing is to discuss your situation before it becomes a problem. For others, private lending is the preferred method to access funding despite the higher rates and fees. Some benefits include:

Quick access to funding – as mentioned above.

Avoid the need to jump through hoops – sometimes, mainstream lenders’ criteria can be quite onerous.

Financials are not always required – this means that there are less documents to collate. Equity can be released without the need to refinance everything – as mentioned above, some private funders will lend against a 2nd mortgage or caveat. Therefore, private funding can also be an effective business tool, rather than just a last resort arrangement to get you out of trouble. However, this type of lending should always be discussed with a professional. So get in touch if you wish to discuss your scenario.

Funding to companies will be for 10 yrs period, after 10 yrs company will return back double the loan amount

Min ticket size 25 Lac to No Limit,

Disbursement within 15 to 20 days once approved.

Documents required:

Business Video

Company Registration proof.

12 Months CA bank statement

PAN Card / Aadhar Card Of The Owner Or Signing Authority.

Private Funding

Rate of Interest: (10./. To 13./. P.A. with collateral)

Rate of Interest: (18./. To 23./. P.A. without collateral) Funding. For all type business

Tenure : 1 yrs to 7 yrs ( Max 10 yrs)

Processing Time : 8 to 15 working days All Over India Funding

For more assistance on NPA Finance or NPA Funding or NPA Restructuring or NPA settlement do speak with our BLPCII (BIGGEST LOAN PROVIDER COMPANY IN INDIA) Financial Advisor. Call 9999305389

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