Corporate Loans - Service Provider, Delhi, India

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Product Code : 08

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Product Specification

Corporate Loans

The banks have recently introduced a scheme of corporate loan under which assistance of Rs. 500 lacs is granted which can be utilised within six months from date of sanction for:

Expansion / modernization / balancing equipment / technology tie ups fees along with meeting of working capital requirements, if any
Takeover of loans of other institutions coupled with additional assistance, if any. However, the assistance shall not cover new projects
Meeting the expenses relating to general corporate needs of unforeseen nature such as VRS/Bonus/IT payments etc.

Eligibility Criteria

The company should be making profits for the last three years
Minimum networth and cash accruals of the company as per the last audited balance sheet should be Rs. 5 crore and Rs. 1 crore respectively (the revaluation reserves shall not be considered towards net worth)
The company should not be in default of principal/interest to banks/financial institutions and its account should have been classified as `Standard Asset’ by its lenders
Current ratio of the company as per last audited balance sheet should not be less than 1:1
Interest coverage ratio of the company as per last audited balance sheet should not be less than 2:1

Financing Parameters

Repayment period	3-1/2 to 5-1/2 years with initial moratorium period of 6-12 months
Promoter’s contribution	Minimum 30%
Debt Equity Ratio	1.5:1 (including proposed loan)
Rate of interest	As applicable to normal term loans.
Processing and up front fee	As applicable in normal term loans cases.

Security

Demand promissory note.
Extension of first charge on fixed assets of the company with asset coverage ratio (including proposed loan and fixed assets) of not less than 1.5 times.
Exclusive charge on fixed assets to be acquired under Corporate Loan Scheme.
Security margin not below 25%
Personal guarantee of promoters.

Other Products

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