Hello,

I am planning to buy an instrument for my small business. The approximate cost is Rs. 9,50,000. After negotiation with the instrument company, the deal finalised is – Rs 2,50,000 as down payment, rest as monthly installments of Rs. 1,00,000.

So my plan is to try to pay off the instrument within a year. My problem is I have provided for the down payment, but the monthly installment of Rs. 1,00,000 with stretch me. Since I will be giving postdated cheques, it may create problem.

What I am looking for is a cash credit of Rs. 5,00,000 which I can dip into if necessary. Since my business is service related, I don’t have any stock or such thing. What I do have is property worth Rs. 10,00,000.

I don’t want to take a term loan, which will carry with it all the problems of prepayment penalty etc. Besides, I will get the loan will be of one large amount with full interest burden. In case of cash credit, the interest will be only on the amount of credit I use.

Can I get a cash credit against property? Which are the banks that give such cash credit?

Thanks,

Sachin