Purpose 

• To meet the working capital requirements of the traders/manufacturers.
  
  
• To purchase shops, furniture and fixtures, equipment  etc.
  
  
• To renovate the existing business premises.

Eligibility

An individual/business enterprises engaged/propose to engage in a business of manufacturing or as wholesale or retail trader in any goods or service providers such as tailors,interior decorators, contractors etc.

In case of existing activity the individual or business enterprises should be in the line  at least for a period of two years. In case of new proposition the person/s proposing to undertake activity should have either professional qualification or a good family background or working in a similar firm at least for a period of three years.

Amount of Loan

• Rs.5 lakhs for a new venture.
  
  
• Rs.10 lakhs in case of trader/manufacture whose annual sales growth during the last 2-3 years is at least 20% and sales turnover of the last year is not less than Rs.50 lakhs.
  
  
•  Rs. 25 lakhs in case the annual sales growth is 25% or more during the last 2-3 years and a sales turnover of last exceeds Rs.1.00 crore as per the audited.

Term Loan

• 25% of cost of assets should be brought in by the proponent as his margin.
  
  
• Debt/Equity Ratio is at least 2:1
  
  
• DSCR is at least 1:5:1
  

Security

Prime Security

 Hypothecation of paid Stock or Book debts of reputed Companies in case of Cash Credit facility. Bill drawn on and accepted by reputed Companies or drawees of good repute. Hypothecation  of assets financed by the Bank.

Collateral Security

NSCs /KVPs/Life Insurance Policies/Bonds/Shares of reputed Companies/Other good Trustee/Securities  or Mortagage of immovable properties.

Margin  

• Working Capital 
  • 20-25% in case of stock in trade
  • 20-30% in case of bills discounting
  • 40-50% in case of Book Debts
    
    
• Term Loan 
  • 20-25% in case of purchase of gala/shop/machinery/equipment.
  • 30-40% for purchase of furniture and fixtures.
  • 40-50% in case of renovation and interior decoration

Margin  should be brought preferably by way of Capital. Unsecured Loan from the family members may be reckoned as margin.

Repayment 

In case of Working Capital facility, it will be reviewed/renewed on  yearly basis. In case of Medium/Long Term Loan , the loan should be repaid  in 72 months for purchase of premises and in case of others in 60 months.

Rate of Interest

Processing Charges  

1% of the loan Amount.
0.5% in case of renewal of Cash Credit

Legal/ Valuation Charges  

In case Colletral security is by way of Equitable Mortgage of shop/gala/flat the legal charges of Bank's Advocate and valuation fee of Bank's Valuer should be borne by the proponent.

Insurance    

The Securities such as stocks, vehicles flat etc.should be adequately insured covering applicable risks with Bank Clause at the cost of the proponent.

Other Conditions

• Working Capital facility may be granted by way of Cash Credit, Bills Discounting, Withdrawal against uncleared effects of the instruments presented in clearing, Bank Guarantee and Letter of Credit.
  
  
• Premises in which the business is carried on should be on ownership or rental (Pagdi) basis.In exceptional circumstances, premises may be taken on Leave and License basis in which case the unexpired period of leave should be more than the period of loan.
  
  
• Guarantee of two persons of good standing should be offered. They should be other than the family members/close relatives of the proponent.
  
  
• Share linkage of 2.5% of the credit facility sanctioned.
  
  
• The proponent should hold valid business licences, if any, required by law for the goods he is dealing with.

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