Corporate Loan Scheme
a. For the entrepreneur
b. For the Corporation
For any tangible or intangible business need such as capex, servicing new orders, renovation of property / assets, reimbursement against self financed assets acquired in the last one year, funding of intangibles like brand building/ marketing, R&D, inorganic business growth, or any other bonafide business need, etc. However, it shall exclude expenditures for speculative purposes like investing in stock markets, commodity trading, commercial real estate activity and an undertaking to be obtained to that effect from the unit.
However, If the loan is used for creation of any fixed assets relating to their business activity, the charge over those assets shall be created in favour of Corporation.
|Quantum of Assistance||The minimum quantum of assistance shall be Rs.20 lakh and the maximum quantum of assistance shall be Rs.100 lakh per unit.|
|Promoter’s Contribution||Since the scheme is being considered to cover existing assisted / earlier assisted units to meet their urgent funds requirements, the promoter’s contribution shall be NIL.|
|Debt Equity Ratio||2.00 : 1.00 (Overall)|
|Assessment of Loan amount||
The eligible credit facility limit of an unit may be determined as under:
a. Gross Cash accrual basis(*) (profit after tax +depreciation) – 75% of the gross cash accrual as per latest audited balance sheet and P & L account multiplied by number of years of repayment proposed. In case audited results of last completed financial year is not available / finalized, provisional CA certified results may be obtained. However, the loan amount shall be the lower of the amount arrived from the last audited Balance Sheet and P&L account or last CA certified provisional Balance Sheet and P&L account.
(*) Profitability estimate should be calculated based on realistic projections and DSCR shall not be less than 1.25 : 1.00
The lower of (a) or (b) above shall be the eligible credit facility limit subject to the overall ceiling limit of Rs.100 lakh.
|Validity of Sanction||The sanction shall be valid for a period of six months from the date of sanction. After the lapse of six months period fresh appraisal with necessary fee shall be done.|
|Repayment||The maximum repayment period shall be 5 years including a moratorium of 6 months for principal repayment and the repayment shall be in equal monthly instalments.|
Collateral security to the extent of 150% of the credit limit sanctioned shall be obtained.
Type of security :
Fixed Deposit shall not be accepted as collateral security.
Considering the highly volatile marketability of agricultural land, the same shall not be accepted as collateral security.
Third party collateral shall not be accepted under any circumstances except properties offered by the below mentioned close relatives.
Grandfather / Grandmother / Father / Mother / Son / Daughter / Grandson / Granddaughter / Brother / Sister / Husband / Wife / Father-in-law / Mother-in-law / Brother-in-law / Sister-in-law.
Personal guarantee of the borrower and owners of property offered as collateral shall be obtained.
The collateral property shall be easily marketable and situated within Corporation / Municipal / Town limits only. Property within Panchayat limits lying in Chennai, Kancheepuram and Tiruvallur districts may also be accepted. The properties are subject to assessment of marketability and valuation by a Committee comprising of Regional Manager, Branch Manager and LAO of the jurisdictional Region and Branch (where the security is located) and the Panel Valuers.
Personal Guarantee of the borrower and owners of property offered as collateral shall be obtained.
Those already notified by Govt.authoritiy for acquisition for any other purpose.( e.g. widening of Highways) shall not be accepted.
Those situated in areas with features hindering easy saleability (e.g., proximity to burial / cremation grounds, high voltage power cables running across, those with difficult approach roads) shall not be accepted.
|Sanctioning Authority||Initially, for all loans, RLSC shall be the Sanction Authority irrespective of the quantum of the proposed loan and irrespective of the existing loan outstanding. After a review of the operation of the scheme, appropriate delegation of authority shall be done with the approval of the Board.|