Builder inventory funding vs bulk price-discount calculator
Once a project receives its Occupancy Certificate (OC), developers often need immediate liquidity to repay high-cost construction debt or acquire land for their next project. Slashing prices by 8% to 12% for a bulk or investor sale permanently erodes project profit. Raising an Inventory Funding facility (at 60% to 70% LTV) lets you unlock Day-1 cash while selling flats at full market price over 12 to 24 months, with an escrow sweep retiring the loan automatically.
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How this is calculated
Monthly Principal Sweep = min(Opening Balance, Monthly Sales × Escrow Sweep %)
Net Profit Saved = (Inventory Value × Discount %) − (Sum of Monthly Reducing Interest + Processing Fee × 1.18)
- Day-1 Liquidity: Unlocks
Unsold Inventory Value × LTV %(typically 60% to 70%) on Day 1 without lowering your per-sq.ft selling price. - Escrow Cut-Back (Sweep): Each month,
Unsold Value ÷ Sell Monthsis collected from homebuyers, andSweep %(e.g. 75%) is applied directly to reduce loan principal. - Processing Fee & GST: Calculated on the sanctioned loan amount plus 18% GST.
- Bulk Discount Comparison: Compares total financing cost against the permanent revenue loss of cutting prices by 8% to 12%.
Not a credit decision or tax/legal opinion. Figures are indicative and based on your inputs; confirm final sanction terms, tax applicability and statutory notifications with your lender, insurer or Chartered Accountant.
Questions people ask
How does an escrow sweep reduce total interest on an inventory loan?
Unlike a fixed-tenure term loan where principal stays high, an inventory loan routes 70% to 85% of every flat sale receipt directly toward principal prepayment. As units sell each month, the outstanding principal drops rapidly and interest is charged only on the daily reducing balance.
What LTV do banks and NBFCs offer on OC-ready unsold flats?
Most lenders sanction 60% to 70% of the conservative market realizable value of unsold OC-ready units, releasing individual flat NOCs as each unit's minimum release price is credited to the escrow account.
Why is an 8% to 12% price cut more expensive than a 12.5% p.a. loan?
Because a 10% price discount is lost on 100% of the inventory value on Day 1, whereas a 12.5% p.a. loan is taken on only 65% of the value (LTV) and its balance reduces every month as flats sell, typically costing only 3.5% to 5% of total inventory value.
Have OC-ready or near-completion unsold flats?
We arrange structured inventory funding from ₹5 crore to ₹500 crore against unsold residential and commercial units through banks and NBFCs.
LTV caps, interest rates, processing fees and escrow cut-back percentages depend on project location, OC status, sales velocity and lender policy. Lenders, regulators and government offices apply their own rules and may round or calculate differently; their figures prevail. Biz Corp Solutions arranges funding through partner banks, NBFCs and financial institutions, and lenders decide sanction, rates and terms. Last reviewed 23 October 2026.