APPLICABILITY:
Applicable to the smallB
Branch for financing of Innovative / Start-up enterprises registered in
India and included in the following –
·
New MSME businesses
set up by promoters experienced / qualified in the line or early stage MSME
units, which have commenced operations (not necessarily profitable but have
potential to break even in near future).
·
Start-up/ early stage
businesses where, the promoters have gone through the learning cycle and a
business model has emerged (with customer acceptance) even though they may not
have turned profitable. However, the intention would be to pick up businesses
which have a stabilization phase of not more than 1 year after funding i.e.
they should turn cash profitable (EBDTA positive) in this phase.
·
Service / technology
units which are making profits but are still unable to attract adequate
financing from formal banking system / VCs (because of lack of assets) for
their growth
NATURE OF
CREDIT FACILITIES:
Under the model scheme, Normal Term Loan for Innovative Projects
(including working capital facility) are to be extended in the form of Term
Loan (including financing shortfall on
account of operating losses). However, in selective basis, In case of
availability of sufficient Stock & Book-Debts, need-based working capital
limit in the form of CCH may also be sanctioned. Non-fund based
facilities, etc. wherever required, may also be extended within the overall
credit limit of Rs 100 lacs. The smallB branch shall extend all banking services in totality.
PRE-CONDITION
FOR FINANCING:
Only the proposals of
those projects are eligible which have been funded by an Angel Investors (of a Network like Indian Angel Networks, Mumbai Angels etc) /
Venture Capital Fund ( Registered with SEBI) in the first stage / subsequent stages. (If not already
funded by way of an Angel/Equity investor, the applicant shall be guided to a suitable
Angel Investor/ Venture Capital Fund.)
MAXIMUM AMOUNT
OF LOAN:
Maximum amount of
credit facilities up to which credit facilities may be extended under the
Scheme is Rs 100 lacs.
MARGIN:
Minimum 30% of the
project cost which may be brought by Angel Investor/ Venture Capital Fund or
subordinate debt from SIDBI or Promoter/s from their own sources but only those
proposals would be eligible which have been funded by an Angel Investors (of a Network like Indian Angel Networks, Mumbai Angels etc) / Venture
Capital Fund in the first stage /
subsequent stages.
CREDIT RATING
:
Investment grade (as per internal credit rating
of Bank) is required as per guidelines under CGTMSE Scheme for exposure more
than Rs 50 lacs.
RATE OF
INTEREST : 12.50% p.a. (Fixed).
The interest
during implementation period and stabilisation period (first year) could be
included in the project cost. On a need basis, upto 50% of the interest payable
by the company during the 2nd year can be funded as Funded Interest
Term Loan (FITL) to be repayable from 3rd to 7th year
along with term loan. Such FITL will carry same interest as the term loan.
UPFRONT / PROCESS FEE: 0.12%
REPAYMENT
PERIOD:
For Term Loan: upto 7
years, including a suitable moratorium u to 3 years, depending upon the
requirement of the unit.
For Cash Credit
Limit: One year subject to renewal or on demand
SECURITY :
· First charge on the project assets
· Coverage under CGTMSE
GUARANTEE :
Personal guarantee of
the promoter(s) / Co-founders
COVERAGE UNDER
CGTMSE :
Coverage of the limit
under CGTMSE is mandatory and the applicable fee/ charges shall be borne by the borrower.
