Vyapar Loan

Purpose

a)for the working capital/any other business purpose including asset creation/ business expansion/development

b) Term Loan for any of the following purposes:

Purchase of built up Unit/Construction thereon/Construction on preowned site for own Business purpose only.
Purchase of existing business units /takeover may also be considered.
Any other purpose whereby asset is created out of Bank’s finance for the purpose of running the business.

Note:Building Construction intended for rental /lease purpose not eligible under this scheme.

The purpose of credit facility will have to be specified along with an undertaking that credit facility will not be used for any speculative purpose whatsoever including speculation on real estate and share market.

Eligibility Criteria

Borrowers can be Individual(s)/Sole Proprietorship/ Partnership firm/HUF/ Joint Stock Company/Limited Liability Partnership or any other entity engaged in trading/manufacturing/service activity.
UDYAM registration is mandatory.
Newly Established Entity /Venture are also eligible for credit facilities under the scheme based on merits and on a case to case basis.
Borrower/ applicant must have either sales tax/ GST registration or trade/business license/permit issued by competent Statutory Authority/Recognized body, financial documents via balance sheet, ITRs.

Type of facility:

facility: Depending upon the need of the borrower, mode of credit facility may be by way of.

Overdraft – Working Capital OD.
Drop line Overdraft
Working Capital Term Loan
Term Loan, including term loan for purchase/ construction of Business Unit.

Quantum of Finance

Minimum: Above Rs. 10 lakh
Maximum Rs.25.00 Cr

However, for the purpose of purchase/construction of built up unit for own business purpose only, maximum amount of finance is Rs 500 lacs

Margin

For fresh cases margin on security shall be as under:

Nature of Security

Immovable Property *

Bank’s own Deposit

LIC Policy

NSC

Margin

25% of Realizable Value of property

10% of Balance outstanding

25% of Surrender Value

25% of Face Value

*In case of Bank finance is requested for built up Unit/ Construction thereon/Construction on preowned site for own Business use only, 35% margin shall be maintained.

Guarantee

In case the properties offered as security are standing in the name of person(s) other than the borrower (as permissible under the scheme), the personal guarantee of all such owners /co-owners shall be obtained.

As per extant guidelines, following guarantee may be considered:.

In case of sole proprietorship concerns - guarantee of wife/major sons(s) /Third Party.
In case of partnership firms – all partners.

In case of Firms/ companies -Guarantee of Partners/ Directors may be taken and in case of Company Shareholders having shareholding of 25% stake in Company shall be obtained.

Repayment:

For Term Loan: Repayable in maximum up to 10 years, including moratorium period of maximum of 12 months, subject to annual review. Interest shall be serviced during the moratorium period Repayable in maximum up to 10 years, including moratorium period of maximum of 12 months, subject to annual review. Interest shall be serviced during the moratorium period.

For Working Capital Term Loan: Repayable in maximum up to 5 years, subject to annual review. EMIs depending on cash flows would be of monthly/quarterly frequency. Term loan is subject to annual review

For Working Capital Limit: Repayable on demand. Credit facility is subject to annual renewal. Interest shall be recovered immediately when due

Drop line Overdraft:

Maximum tenor of 10 years (120 months) subject to annual reviewal.
The drawing power will be reduced on monthly/quarterly/Half Yearly/Yearly basis with fixed amount so as the total loan is liquidated at the end of the loan tenure.
Over-drawings / adhoc/TOD is not permitted in Drop line OD.
Interest shall be serviced as and when applied.

Takeover charges

For Term Loan/ Working Capital Term Loan/Overdraft: /Drop line Overdraf

Pre-payment of loan is permitted at no additional charge /penalty to the borrower, if it is repaid from its own sources. However, in case of closure of credit facilities on account of takeover by any other Bank/NBFC/FI, 3% prepayment penalty on the outstanding amount for closure within 24 months and 2% prepayment penalty thereafter is to be charged.

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