Bill Financing Scheme
Bill Financing Scheme
Tamilnadu Industrial Investment Corporation Limited (TIIC) has launched the bill financing scheme to provide financial assistance for the MSME sector. The scheme provides funding for the MSME and non-manufacturing enterprises to whom TNEB/ TWAD/ TANSI has issued purchase order. The scheme also covers the manufactures of indigenous machinery, capital equipment, components sub-assemblies etc. In this article, we look at the Bill Financing Scheme in detail.
All MSME units, as well as service providers to whom TNEB/ TWAD/ TANSI/ TNPL has issued orders for the supply of available materials or the execution of work contract, are eligible to avail the benefits of the bill financing scheme.
Quantum of Loan
The quantum or scale of assistance will be 50% of the value of the order given by TNEB / TWAD / TANSI / TNPL.
The withdrawal limit is set upto 75% to 80% of the total amount of the invoice bill, i.e. after deducting the percentage of retention amount specified by TNEB / TWAD / TANSI / TNPL.
The processing fee from Rs.2,000/- to 1%, depending upon the scheme applied will be received at the time of receipt of the application submitted.
The renewal fee will be 0.50% of the limit sanctioned will be collected for renewal of the limit.
The penal interest will be 2.5% of the limit for the defaulted amount for the defaulted period.
Rate of Interest
The proposed rate of interest charged under the bill finance scheme will be at the rate of 13.70%.
The maximum credit period for each will be 120 days.
The loan will be secured by Post Dated Cheques provided by the unit. The amount of the post-dated cheques will be the bill amount disbursed for each Bill along with interest from the disbursement date to the post-dated cheques date, i.e., 180 days from the date of disbursement.
The loan will be secured by the personal guarantee of Proprietor / Partners / Directors of the applicant unit.
The following documents are to be furnished while applying for the scheme.
- Photocopy of MSME Registration along with the application.
- Income – Tax Assessment Orders or Clearance Certificate of the Proprietor/Partner/Director in the Individual capacity.
- The signature of the authorised signatory of the applicant unit attested by the Banker of the unit.
- If a Private I Public Limited Company, furnish the Articles and Memorandum of Association with the list of Directors/shareholders.
- If it is a partnership firm a copy of the partnership deed duly registered with the concerned authority, letter in respect of authorised partner, Firm Registration Certificate.
- If it is a Private / Public Limited Company, a copy of Board Resolution authorising the signatories to sign for and on account of the company. In case of partnership firm, power of attorney in favour of the signatory to deal with TIIC. The statement of the net worth of proprietor/partner/Director and details of associate concerns along with more information of shareholdings.
- Copy of Sales-tax clearance certificate.
- Copy of the TNEB purchases order for the supply of ASCR Conductors/AAAC conductors/ Transformers for the current year.
- Copy of previous two years orders from TNEB for the supply of ACSR/AAAC conductors/Transformers.
- Sample Invoices of the unit relating to TNEB along with other related documents that will be furnished to TNEB.
- Consent letters from guarantors to offer personal guarantee In the specified format.
- Any other documents are relevant to the supply Bills to TNEB.
- Copy of ISI Certificate (B.I.S Licence).
- Audited working results from Financial statements for the past two years.
Application Procedure for the Bill Financing Scheme
To apply for the bill financing scheme, follow the procedure specified here.
Visit Official Website
Step 1: Please, visit the official portal of TIIC, Tamilnadu Government.
Application form Download
Step 2: Click on “Application form download” under the scheme option which is displayed on the home screen of the portal.
Choose Application Form
Step 3: Select the respective application form from the list of options shown below.
Download the Form
Step 4: Now the form for the bill financing scheme will be downloaded on your screen.
The application form for the bill finance scheme- TNEB is reproduced below in the pdf format for your reference.
Complete the Details
Step 5: Fill the application form with the necessary details such as
- Name of the applicant
- Address of the organisation
- Industry Type
- Details of the Director/ Proprietor/ Partners
Attach Upload Documents
Step 6: After filling all the mandatory information and then attach the documents required along with the application form.
Submit the Application
Step 7: Now apply the duly filled application form to the nearby TIIC office.
Note: The concerned authority will verify the submitted application with the particulars if satisfied with the application will be processed.
Validity of Sanction
The sanction will be valid for one year from the date of approval, and it will be repeated every year on production of TNEB / TWAD / TANSI / TNPL purchase order for the next year.
Regional Loan Sanction Committee (RLSC)
The scheme also covers the manufactures of indigenous machinery, capital equipment, components sub-assemblies etc. The Managing Director heads the Regional Loan Sanction Committee along with GM (Project)/AGM (Project), DGM of LM&R/Recovery and the concerned Regional Manager. The Committee sanctions loans. Powers of sanction of RLSC are at Annexure-VII. In respect of Bill finance proposals for an amount upto Rs.3000 lakhs, RLSC will be the delegated authority to sanction.
Also read about Corporate Loan Scheme