Purpose
• To meet working capital requirements for business activity.
• For Shoring-up of Net Working Capital.
• For purchase/construction/renovation of factory/ offices / shop / godown.
• For purchase of plant & machinery.
• For purchase of equipment.
• Financing repayment of high cost debts
Eligibility
• All business enterprises irrespective of constitution (Proprietorship/Partnership/Companies/Trust/Association etc) other than individuals and HUF engaged in business activity for minimum last two years.
• Enterprises engaged in speculative activities/Real Estate activities are not eligible for finance under this scheme.
Facility
Term Loan/Overdraft facility
Quantum of Finance
• Minimum Rs.0.10 crore
• Maximum Rs.10.00 crore
Margin
50% of the fair market value of the property as per valuation report i.e. value of property should be minimum 200% of the proposed loan amount.
Charges
Nil
Guarantee
• Personal guarantee of the partners / directors /promoters (Other than independent/professional director) to be obtained.
• Personal guarantee of property owners to be obtained
Repayment
• Term Loan to be repaid in maximum 120 months inclusive of moratorium period not exceeding 6 months. Interest is to be paid as and when due.
• Overdraft facility is for a period of one year. However, itmay be further extended subject to review/renewal of the facility by competent authority on yearly basis.
• The loan repayment must end atleast 5 years before the end of the residual life of the property as per Valuation report.
Credits – Union Bank of India