As its name describes, this is a loan offered by lenders to borrowers based on the collateral they offer. This collateral is not just any asset but a real estate property and can be availed by any organisation, business or individual.
In order to get money for a certain purpose, not everyone is ready to sell the property they own. Additionally, they might not get the right price, if they are selling urgently. In some cases some properties cannot be sold quickly.
Therefore, this is an ideal situation for borrowers who need funds for settling other business debts, expanding business, or meeting other business needs like working capital.
