INDUSTRIAL LOAN

PAWEL GAUTAM

What is industrial loan?

• Any type of loan made to a business or corporation and not to an individual. Commercial and industrial loans can be made in order to provide either working capital or to finance major capital expenditures. This type of loan is usually short-term in nature and is almost always backed with some sort of collateral. Commercial loans usually charge flexible rates of interest

What is MSME loan?

• In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

• (a) Manufacturing Enterprises• (b) Service Enterprises

Manufacturing Sector (Investment in plant & machinery)

Micro Enterprises- Does not exceed twenty five lakh rupees

Small Enterprises- Twenty five lakh rupees to Five crore rupees

Medium Enterprises-Five crore rupees to Ten crore rupees

Service Sector ( Investment in equipments)

Micro Enterprises-Does not exceed ten lakh rupees

Small Enterprises-Ten lakh rupees to Two crore rupees

Medium Enterprises- Two crore rupees to Five core rupees

In presently many provide MSME loan but few bank are major leader bank of this sector

Facilities for MSME borrower1.  Laghu Udyami Samekit Loan2. SME Liquid Plus3. SME Auto Express4. SME Contractor Credit Line5. SME Education Plus6. MSE Term/Demand Loan

MSE Term/Demand LoanTarget Group• Micro & Small Enterprises in

rural, semi urban, urban and metro branches

Purpose• Purchase Plant &

Machinery/Equipment/Other Moveable Assets.

Implementing Agency• The scheme will be implemented

directly by the Bank. No outside agency whether Government or otherwise will be involved in the implementation

MSE Term/Demand Loan (Quantum of Loan)

For units located in Maximum Amt of Loan

Rural Areas Rs.5,00,000/-

Semi-urban Areas Rs.10,00,000/-

Urban Areas Rs.50,00,000/-

Metro Areas Rs.100,00,000/-

MSE Term/Demand Loan (Rate of Interest)Note: 1-Term Loans under the scheme will not attract term Premium as approved by ED/26.07.2010 2- ROI is linked to Base Rate (Floating).

Limit RoI

Upto Rs.50,000/- 10.20%

Above Rs.50,000/-upto Rs.5,00,000/-

11.20%

Above Rs.5,00,000/- upto Rs.10,00,000/-

12.20%

Above Rs.10,00,000/- upto Rs.100,00,000/-

12.95%

1. I-Concession of 0.50%  in ROI on account of CGTMSE Guarantee cover has already been  factored

2. No other concession including those meant for Priyadarshini, SME rating etc., will beextended under the scheme.

3. No further account specific concession to be considered.

MSE Term/Demand Loan (Securities)

• 1. Hypothecation of Assets created out of bank finance as well as existing unencumbered assets of the MSE unit.2. Equitable Mortgage of Land/ Land & Building which is part of the business activity such as business premises.3. Guarantee Cover under CGTMSE Guarantee Scheme.

• No collateral security/third party guarantee to be obtained.

MSE Term/Demand Loan (Processing Charges)

Limit Processing Charges

Upto Rs.1,00,000/- Rs.500/-

Above Rs.1,00,000/- upto Rs.5,00,000/-

Rs.1,000/-

Above Rs.5,00,000/- upto Rs.10,00,000/-

Rs.1,500/-

Above Rs.10,00,000/- upto Rs.50,00,000/-

Rs.5,000/-

Above Rs.50,00,000/- upto Rs.100,00,000/-

Rs.10,000/-

MSE Term/Demand Loan (Documentation)

1. Proof of identity – Voter’s ID Card/Passport/Driving License/PAN Card/signature identification from present bankers of proprietor, partner or Director (if a company).

2. Proof of residency – Recent telephone bills, electricity bill property tax receipt/voter’s ID Card of proprietor, partner or Director (if a company)

3. Proof of business address.4. Last three years balance sheets of the units along

with income tax/sales tax returns etc.5. Memorandum and articles of Association of the

Company/Partnership Deed of partners etc.

MSE Term/Demand Loan (Documentation)

6) Assets and liabilities statement of promoters and guarantors along with latest income tax returns.

7) Project report (for the proposed project if term funding is required) containing details of the machinery to be acquired, from whom to be acquired, price, names of suppliers, financial details like capacity of machines, capacity utilization assumed, production, sales, projected profit

MSE Term/Demand Loan (Processing and Repayment)

• Processing • Simplified Application cum Proposal Forms

given in the annexure to be used.• Turnaround time for sanction of limits upto

Rs.5 lacs will be 5 working days and for limits above Rs.5 lacs, 7 working days after all relevant information is obtained.

• Repayment• Loan is to be repaid in maximum 5 years with

a moratorium of 3 to 6 months to be determined on the merits of each case.