Corp SME Tex plus Scheme

Last updated : December 17th, 2019 05:04 pm

Corp SME Tex Plus Scheme

Corporation Bank provides a comprehensive range of innovative and business-friendly banking products and services for MSME Entrepreneurs. Corporation Bank has launched Corp SME Tex plus Scheme for textile units in SME Sector. The primary objective for this scheme is to provide liberal and hassle-free project and working capital loans to textile units. In this article, we will look at Corp SME Tex plus Scheme in detail.

Features of Corp SME Tex plus Scheme

The features of Corp SME Tex plus Scheme is explained in detail below:

Liberal and hassle-free projects and working capital loans to textile units in the SME Sector.
Corporation bank provides foreign currency loans to exporters with consistent performance.

Purpose

The purpose of implementation of Corp SME Tex plus Scheme is for setting up new units, expansion, technology up-gradation, substitution of high-cost debt and working capital requirements.

Eligibility Criteria

The eligibility criteria to obtain the Corp SME Tex plus Scheme is explained in detail below:

Eligibility Criteria for Existing Units

The SME unit should have earned a net profit during the last financial year
At the end of the last financial year, the unit should have the following ;
Debt Equity of not more than 3:1
Current Ratio 1.17:1
Projected average DSCR 1.50:1
TOL to TNW not more than 5:1

Eligibility Criteria for New Units

Promoters will have adequate experience/skills in the proposed line of activity.
Projected Ratios will conform to the above.

Nature of Facility

The Corporation bank provides Term Loan and Working Capital under the Corp SME Tex plus Scheme.

Loan Amount

75% of the cost of machinery and equipment subject to a maximum Term Loan of Rs.7.50 crore and a maximum of the limit of Rs.7.50 crore for working capital.

Note: In the case of existing units, the total investment in Plant and Machinery including the CAPEX should not exceed Rs.10 crores

Margin Details

For term loans, 25% of the cost of machinery/equipment is provided as part of the Corp SME Tex plus Scheme.

Rate of Interest

The rate of interest for Corp SME Tex plus Scheme 0.25% below the Applicable card Rate.

Women Entrepreneurs are given 0.25% concession on Card Rate.
0.50% and 0.25% relaxation in the rate of interest to SME borrowers with the highest rated and high and average rated borrowers will continue
Cumulative concession should not be fall below the relevant MCLR

The detailed rate of interest for Corp SME Tex plus scheme loan is given in this document:

march-apr_2019

Security

Existing assets of the unit as well as assets to be acquired out of Corp SME Tex plus Bank loan.

No collateral upto Rs.25 lakh
Repayment and Validity Details
Running account repayable on demand subject to the annual renewal.
Term loan repayable within seven years.

Guarantor Details

Personal guarantee of directors, partners in the case of Partnership firm, Private, Public limited Corporations.

Documents Required

Documents required for Corp SME Tex plus Scheme is explained in detail below:

Proof of Identity – Voter’s ID, Passport, Driving License, PAN Card, Aadhaar signature identification from present bankers of the proprietor, partner or director
Proof of residence – report telephone bills, electricity bills, Property tax receipt, Aadhaar /passport/voter’s ID Card of the proprietor, partner or Director (if a company)
Proof of business address
Proof of minority
The entrepreneur should not be a defaulter in any Corporation Bank/F.I
Last three years balance sheets of the SME units along with the Income-tax/sales tax returns
Applicable for all cases from Rs.2 lakhs and above. However, for cases below the fund based limits of Rs. 25 lakhs if audited balance sheets are not available, then unaudited balance sheets will have to be produced

Note: For cases of Rs. 25 lacs and above, the audited balance sheets are necessary

Memorandum and Articles of association (MOA) of the Company or Partnership Deed of partners
Assets and liabilities statement of the promoters and guarantors along with latest income tax returns
Rent Agreement (In case business premises on rent) and clearance from the pollution control board
SSI/MSME registration if applicable
Projected balance sheets of two years if the working capital limits and the period of the corporation bank loan in case of the term loan.
In case of takeover of advances, the sanction letters of facilities being availed from existing bankers or financial Institutions along with detailed terms and conditions need to be submitted

For Cases with exposure above Rs. 25 Lakhs

Profile of the unit, It should include names of promoters, other directors in the company, the activity being undertaken, address of all offices and plants, shareholding pattern)
Last three years balance sheets for the associate and Group Companies (If any)
Project reports for the proposed project if term funding is required. The report should contain the details of the machinery to be acquired, price, names of suppliers, financial information like the capacity of machines, capacity utilization assumed, production, sales, projected profit and loss. Balance sheets for the next seven to eight year until the proposed loan is to be paid.
Review of account containing the month wise sales (quantity and value both), production, imported raw materials and indigenous raw material, the value of stocks in the process, finished goods (quantity and value), creditors, debtors, bank’s outstanding for the working capital limits, term loan limits and bills discounted.
Photocopies of lease deeds and title deeds of all the proprieties being offered as primary and collateral securities.
The position of accounts from the existing bankers and confirmation about the asset being Standard with them
Manufacturing process if applicable, the primary profile of executives in the company, tie-ups details, the raw material used and suppliers, details about the buyers, details about significant competitors and the company’s strength and weaknesses as compared to their competitors