Margin Trading Facility
Margin is the money borrowed from a brokerage firm to purchase an investment. It is the difference between the total value of securities held in an investors account and the loan amount from the broker. Buying on margin is the act of borrowing money to buy securities. The practice includes buying an asset where the buyer pays only a percentage of the assets value and borrows the rest from the bank or broker. The broker acts as a lender and the securities in the investors account act as collateral.

In a general business context, the margin is the difference between a product or services selling price and the cost of production, or the ratio of profit to revenue. A margin can also refer to the portion of the interest rate on an adjustable-rate mortgage (ARM) added to the adjustment-index rate.

IPO Financing
IPO financing is a short-term credit provided by the NBFC arm of broking firms, typically to HNIs. The investor is required to make an upfront payment of the margin amount, which can vary across NBFCs and IPO issues. An interest rate of about 10-11 per cent (per annum) is charged for the loan which is usually extended for the period between the close of the IPO and the date of listing, that is, six days. NBFC’s typically raise the required quantum of funds through issue of short-term debt instruments of, say, seven days.

ESOP Financing
As a part of employee benefit plans, companies provide their workforce an ownership interest in the company through Employee Stock Ownership Plans (ESOPs). Although Employee Stock options are given to the employees at a price which is usually lower than the market value, employees need money to pay the exercise price as well as the perquisite tax on the differential value of the stocks which arises on the day of exercising the option.

The difference in stock prices between fair market value and ESOP value is treated as perquisite and is eligible for TDS deduction by the company and forms part of salary of the employee which is shown in Form 16 and Form 12BA of the employee.

If you have received such an offer and find it lucrative but don’t have enough money to exercise the option, you may consider the ESOP funding to finance both the exercise price as well as the perquisite tax at a simple interest for up to 13 months.

You may avail the funding provided that you are holding an Entitlement Letter from your employer and you are a resident Individual customer.

Home Loans
A house loan or home loan simply means a sum of money borrowed from a financial institution or bank to purchase a house. Home loans consist of an adjustable or fixed interest rate and payment terms.
We are one of the leading distributors of home loan products for all leading banks and NBFC’s.

Loan Against Property
A loan against property is a type of secured loan availed against a commercial or residential property kept as collateral with the lender. As the funds come with no end usage restriction, borrowers can utilise the funds for various purposes such as business expansion, wedding, childs education, etc.

Bank Guaranties
A guarantee means giving something as security. A bank guarantee is when a bank offers surety and guarantees for different business obligation on behalf of their customers within certain regulations. It is generally a promise made by the bank to any third person to undertake the payment risk on behalf of its customers.
Bank guarantee is given on a contractual obligation between the bank and its customers. Such guarantees are widely used in business and personal transactions to protect the third party from financial losses.
There are two major types of bank guarantee used in businesses, which are as follows:
oFinancial Guarantee – These guarantees are generally issued in lieu of security deposits. Some contracts may require a financial commitment from the buyer such as a security deposit. In such cases, instead of depositing the money, the buyer can provide the seller with a financial bank guarantee using which the seller can be compensated in case of any loss.
oPerformance Guarantee – These guarantees are issued for the performance of a contract or an obligation. In case, there is a default in the performance, non-performance or short performance of a contract, the beneficiary’s loss will be made good by the bank.

Working Capital
A working capital loan is a loan that is taken to finance a companys everyday operations. These loans are not used to buy long-term assets or investments and are, instead, used to provide the working capital that covers a companys short-term operational needs. Those needs can include costs such as payroll, rent and debt payments. In this way, working capital loans are simply corporate debt borrowings that are used by a company to finance its daily operations.

Private Equity
Private equity firms raise funds from institutions and wealthy individuals and then invest that money in buying and selling businesses. After raising a specified amount, a fund will close to new investors; each fund is liquidated, selling all its businesses, within a pre-set time frame, usually no more than ten years.

Asset Re Construction
Asset Reconstruction is the acquisition of any right or interest of any bank or financial institution in loans, advances granted, debentures, bonds, guarantees or any other credit facility extended by banks for the purpose of its realisation. Such loans, advances, bonds, guarantees and other credit facilities are together known by a term – ‘financial assistance’.
An asset reconstruction company is a special type of financial institution that buys the debtors of the bank at a mutually agreed value and attempts to recover the debts or associated securities by itself. The asset reconstruction companies or ARCs are registered under the RBI and regulated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002). The ARCs take over a portion of the debts of the bank that qualify to be recognised as Non-Performing Assets.

Thus, ARCs are engaged in the business of asset reconstruction or securitisation or both. All the rights that were held by the lender (the bank) in respect of the debt would be transferred to the ARC. The required funds to purchase such debts can be raised from Qualified Buyers.