2. Purpose

Assistance under the scheme will be for purchase of identifiable item of plant and machinery and other equipment including energy saving systems for modernisation / expansion / balancing / replacement. Machinery / Equipments imported directly will also be eligible.

3.Eligibility criteria

Assistance under the scheme will be available to existing industrial concerns having a good past record of performance and sound financial position. Specifically, concerns should:-

• Have been in operation for atleast 3 years.
• Have earned profits and / or declared dividend on equity shares during the preceeding two financial years and;
• Not be in default to institution / banks in the payment of their dues.
• Have positive networth

4.Level of Assistance

Assistance under the scheme may cover upto 85% of the cost of Capital goods / equipment to be acquired, subject to an overall ceiling of Rs.1000 lakhs. The borrower concern will have to meet the minimum of 15% of the cost of the equipment and also the allied expenditure out of own resource which shall be brought in as up-front before release of loan. The assistance under this scheme will be a minimum of Rs.5.00 lakhs.

5. Financial norms

The overall Debt Equity Ratio including the finance for capital goods / equipment proposed under Equipment Finance Scheme should not exceed 2.00 : 1.00. (overall)

7.Security

• Primary Security:- Loans granted under the scheme may be secured by way of hypothecation of capital goods / equipment financed.
• Collateral security:- Collateral security covering 50% of the assistance under this scheme shall be ensured by way of immovable property.