COMPOSITE LOAN SCHEME

    The Scheme envisages sanction and disbursement of working capital and term loan together from a single agency. The limit for composite loans has been enhanced to Rs. 25 lakhs in the Comprehensive Policy Package.

    The Scheme is operated both by banks and financial institutions. State Financial Corporations under Single Window Scheme provide working capital loan along with term loan to new tiny and small scale sector units so as to overcome the  initial difficulties and delays faced by them to start production expeditiously.

    Indicative Parameters

    Debt-equity Ratio

    3:1 in the total venture of outlay (i.e., cost of the project plus working capital requirement) after taking into account the amount of investment/subsidy/incentive available for the project.

    Promoter's Contribution

    As may be required to arrive at the Debt Equity ratio of 3:1

    Margin for Term Loan

    - All backward areas in the State 25%
    - Other areas and Municipal limitsof all cities of the state 30%

    Rate of Interest : (Effective)
     
     

    LOAN DESCRIPTION

     I TIER
    During construction period

    II TIER
    Remaining period implementation/  of term loan

    1.TERM LOAN

    		    

    a) For new units in backward area

    12.5%

    13.5%

    b)For units in non-backward area

    13.5%

    14.5%

    2. WORKING CAPITAL LOANS

    		    

    a) All loans upto  Rs 2 lakhs

    15.0%

    		  

    b) All loans exceeding Rs 2 lakhs

    16.5%

    		  
     

    Repayment

    Working Capital Component
    - Not exceeding 10 years (including moratorium upto 13 years)

    Term Loan Component
    - Not exceeding 8 1/2 years (including moratorium of 18 months)

    Security

    Corporation will have first charge on fixed assets and hypothecations of the current asset. Corporation may also ask for Collateral Security against Working Capital Loan.

    Terms and Conditions

    - Working Capital loan should be availed within one year from the date of commencement of production.

    - The unit should open a current account with a designated bank and the amount of working capital of the loan will be credited as and when disbursed by the Corporation.

    - The unit should  route its entire transaction of the  business including all the receipts and payments through this account only.

    - The unit should repay the entire working capital loan sanctioned by the Corporation at once in case the unit approached the bank for more working capital.

    - The unit should provide monthly stock statement showing the position of inventory level of the Corporation. If they fail to provide the same, the Corporation may recall the loan.

    - All other terms and conditions would be applicable as per details given in the General Folder of the Corporation.

    The above information regarding Composite Loan Scheme is by way of indicative guidance for entrepreneurs and it is not a binding obligation on a Bank/Corporation while considering the loan and is subject to change from time to time.