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CHAIRMAN MESSAGE !

"Success is getting what you want, happiness is wanting what you get"
"Try not to become a man of success. Rather become a man of value."

Our object is !

To lend, grant loans to the society as against securities of Immovable properties, and/ or on the security of deposits, movables such as Gold, \Silver, Jewellery, KisanVikasPatra, National saving Certificates Scheme, Insurance Policies and other government securities up on such terms and conditions as may From time to time prescribed in law for Company Registrar.
Kundles Motor Finance Pvt. Ltd. floats a variety of easy-to-get loan products to meet this demand, cut red tape for small businesses.

Apart from the obvious need for hard cash when starting any enterprise, there are also times when a business faces a liquidity problem. In such a scenario, securing funds in the absence of proper collateral or securities is tough. And, although there are a number of financial products that can help, negotiating the paperwork and time taken to prove your creditworthiness can be nerve-wracking.

Smart businessmen are now leveraging the rising value of gold in the market and using it to provide their businesses with much-needed liquidity. The good news is both banks and financial institutions have begun to offer gold loan products and the application process is quick and uncomplicated.

uncomplicated. "Loans against gold are essentially securities-backed and have been quite popular in rural areas. This precious metal is liquid and has a quick turnaround time because of its market value," says R.K.Gola, Chairman, Kundles Motor Finance Pvt. Ltd.

Is it for you ?

While most banks offer gold loans in the retail category, a quick study of borrowing patterns reveals the product's recent popularity among SMEs. "Small entrepreneurs from both the services and manufacturing sectors, mainly proprietary firms, are opting for gold loans to meet their requirement for additional finance. This includes enterprises which do not have financial statements to support a credit report," says A.K. Gola, Director, Kundles Motor Finance Pvt. Ltd.

For an SME, gold loans provide an avenue of easy-to-get and easy-to-manage loans for their short-to-medium term needs. "Although we have a gold loan for retail customers, it is mainly businesses that apply for them. Generally, these loans are taken to meet their working capital needs," says _______________

What to pledge !

Banks accept gold ornaments and gold coins while we accept only jewellery. Gold bars are a strict 'no' for both. Also, most banks and NBFCs take only 22-carat gold. There are exceptions, like Kundles Motor Finance Pvt. Ltd., which takes gold above 18 carat. Precious and semi-precious stones embedded in the jewellery reflect in the pledge document but do not have any bearing on the loan amount, which depends solely on the quality and quantity of the gold.

LTV !

There is a ceiling on the sum financial institutions are allowed to sanction, called the Loan-to-Value Ratio (LTV). In March 2012, the RBI capped the LTV for NBFCs at 60 per cent of the value of ornaments. There is no such cap for banks. Hence a bank will offer at least 80 per cent of the value of gold as loan, whereas an NBFC will offer only 60 per cent of the value of gold. You can avail a gold loan up to a maximum Rs 75 lakh to Rs 1 crore.

Documentation !

Documentation is minimal but remember to check if there is any processing fee as banks charge a fee that ranges from 0.05 per cent to 1.5 per cent of the loan amount. You need to submit proof of identity and a know-your-customer document. Some banks may ask for your Permanent Account Number too. Once the appraiser checks the quality and quantity of the gold, it does not take more than an hour to process.

Repayment !

Some NBFCs offer facilities for daily repayment and part-redemption without any charges. Delayed payments usually involve a penalty. Usually, banks charge 2 per cent per annum over the loan amount. If you consistently default on repayment of interest or installments, the lender could seize the gold pledged. Also, banks do not want to keep a loan running because it is counted as a non-performing asset.. "Remember to take a valuation certificate and the sanction letter when you pledge your gold. Go for it only if you are confident you can repay on time otherwise you might end up losing your jewellery," advises Roy.

You can send your feedback to rkgolamd@gmail.com or simply post comments below

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