Trade Loan

    Purpose :
  • Working Capital Requirements: To meet day to day working capital requirement of the unit/establishment.
  • Term Loan: Acquiring/construction of premises, go-downs on ownership basis required for running the business/for repair, furnishing, renovating existing business premises and/or purchase of furniture & fixtures and for purchase of brand new equipments, business tools, computers, UPS etc.
  • Target Group :
  • All Traders who are individuals, firms, companies, co-operative societies dealing in any lawful trading activity i.e. trading in goods & services, which is neither restricted nor prohibited by RBI/Govt.
  • Business concerns/agencies providing services such as Xeroxing, dry cleaning, licenses to deal in petroleum products/LPG, auto service centers, ISD/STD PCO Booths etc. are also eligible.
  • Traders/ Business concerns having Registration/ License as applicable under local laws (i.e. Shops & Establishments Act)/ appropriate authorities.
  • The proponent should preferably be engaged in the line of business for at least one complete financial year for which Income Tax Returns have been submitted along with Statement of Financial Result’s orFinancials duly certified by a firm of Chartered Accountants acceptable to the sanctioning authority. The unit should be a profit making one.
    Loan Limit :
  • Credit facilities will be sanctioned up to a limit of Rs. 5.00 Crores.
  • Margin
  • 25% on stocks
  • 30% on receivables upto 90 days only
  • 25% on term loan sanctioned for equipments, tools, furniture & fixture, computer hard-wares etc.
  • 50% on term loan sanctioned for acquiring/construction of premises, go-downs.
  • 20% cash for Letter of Credit/ Bank Guarantee.
  • Exclusive hypothecation charge on stocks, book debts & other current assets and exclusive hypothecation charge on all fixed assets such as, equipments, business tools, computers, furniture & fixtures etc. of the unit. In case of loan sanctioned for acquiring/ construction of premises on ownership basis, the property should be mortgaged in favour of Bank as per Bank’s manual of mortgages.
  • 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.
  • Guarantee: In case of Partnership firms, personal guarantee of all the partners. For Private Limited companies, personal guarantee from all the promoter directors required. For Public Limited companies, personal guarantee of at least one of the promoter directors and/or directors having major financial stake in the business required.
    Repayment Period
  • Term Loan:
    • Depending upon the cash flows as well as effective life of the equipment, a maximum of 84 months including moratorium.
  • Clean Term Loan:
    • Maximum tenure of 3 years depending on cash flows.
  • Working Capital:
    • On demand subject to review every year.
  • LC/Guarantee:
    • As part of working capital limits, subject to review every year.
  • 20% cash for Letter of Credit/ Bank Guarantee.
  • Prepayment penalty
  • 2.25% of outstanding balance of Term Loan in case of take over.