Target Group

Traders working individually, firms (Proprietorship/Partnership), companies, co-operative societies dealing in any lawful trading activity or Business concerns/agencies providing services

Eligibility

Registration/ License as applicable under local laws
Preferably be engaged in the line of business for at least 1(one) complete financial year for which Income Tax Returns have been submitted.
New units may also be considered selectively in deserving cases.

Nature Of Credit Facility & Purpose 

Cash Credit :  To meet day to day working capital requirement
Term Loan :
Acquiring/construction of premises, go-downs for running the business.
For repair, furnishing, renovating existing business premises and/or purchase of furniture & fixtures.
For purchase of brand new equipments, business tools, computers, UPS etc.
Clean Term Loan For payment of Security Deposits and/or long term revenue expenditure like, advertisement, cost of franchisee, licenses etc.

Quantum of Loan

Maximum Rs. 5.00 Crores.
Term Loan including Clean Term Loan should not exceed 50% of total loan requirement including working capital, i.e. maximum to an extent of Rs.2.50 Crores for aggregate credit facility of Rs.5.00 Cr.

Methodology for Assessment of Term Loan/ Working Capital

For working capital:
Loan amount upto Rs 2 Crore: 20% of the sales turn-over
Loan amount more than Rs.2.00 Crore and upto Rs.5.00 Crore: MPBF may be assessed as per 2nd Method of Lending.
(Estimated/projected sales & other financial parameters for both existing as well as new units).
For Term Loan: 50% of total Term Loan requirement may be allowed for acquiring/ construction of premises, go-downs on ownership basis required for running the business while the remaining 50% may be sanctioned for other fixed assets relevant to the business.
Letter of Credit/ Bank Guarantee limits may be sanctioned up to 50% of working capital limit keeping in view, the genuine requirement of the borrower.
Clean Term Loan: The facility of Clean Term Loan sanction, repayable within a period upto 3 years can be considered for the purpose of providing with long term deposit like, security deposit and/ or long term revenue expenditures like advertisement, cost of franchisee, licenses etc.

Security

Primary:
Hypothecation of stocks, book debts, other current assets, all fixed assets such as, equipments, business tools, computers, furniture & fixtures etc. of the unit.
Mortgage of property in case of loan sanctioned for acquiring/ construction of premises
Collateral:
For existing units :
Collateral security in the shape of NSC’s, LIP (Surrender Value) or any other tangible security with realizable value at least equivalent to 75% of the total exposure.
For New units:
Collateral security in the shape of NSC’s, LIP (Surrender Value) or any other tangible security with realizable value at least equivalent to 100 % of the total exposure.
Facility sanctioned under Clean Term Loan should be fully secured (100%) by tangible collateral security in the form of NSC/ LIP
In case of borrowers classified under MSE category collateral security and personal guarantee is not required if CGTMSE cover is obtained.

Personal Guarantee

In case of Partnership firms, personal guarantee of all the partners.
In case of Private Limited companies, personal guarantee from all the promoter directors.
In case of Public Limited companies, personal guarantee of at least one of the promoter directors and/or directors having major financial stake in the business.

Margin

a) 25% on  stocks
b) 30% on receivables upto 90 days only
c) 25% on term loan sanctioned for equipments, tools, furniture & fixture, computer hard-wares etc.
d) 50% on term loan sanctioned for acquiring/construction of premises, go-downs.
e) 25% on Clean Term Loan
f) 20% cash for Letter of Credit/ Bank Guarantee.
In case of commodities covered under Selective Credit Control, margin as stipulated by RBI to be maintained.

Tenure/ Repayment

Term Loan: Maximum of 84 months (including moratorium)
Clean Term Loan: Maximum tenure of 3 years.
Working Capital: one year (To be reviewed annually)
LC/Guarantee

Stock statements

Stock & book debt statements should be obtained on quarterly basis.

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Documents /Information to be provided by the applicant

• Proof of identity, address proof of the applicant i.e. individual, firm/company and constitutional documents e.g. Partnership Deed, Memorandum and Articles of Association, Certificate of Incorporation/ Commencement of Business, share holding pattern, list of Directors, etc.
• PAN Card
• Proforma Invoice of machine/ equipment etc to be purchased
• License/ approvals/ clearances required, if anyDetails of existing machinery, if any.
• For acquiring premises/ construction - proof of ownership/letter of allotment/Agreement to sell, construction plan, necessary approvals from statutory bodies, estimate of cost of construction/ renovation.
• Income Tax Returns & Financial statements for the last two years (Actual), Estimates for the current year and projections for future period as per repayment period in case of existing units. In case of new units, estimate for the current year only and projections for the future period.
• Bank statement for last six months.
• Documentary proof of security offered including proof of ownership of immovable collateral securities offered with complete chain of title deeds, latest house tax receipts, income tax & other statutory dues clearance certificates.
• Photographs of the authorized signatories and guarantors, if any along with proof of their identity and address.