TMB Traders and Services Scheme
TMB Traders and Services Scheme
The Tamil Nadu Mercantile Bank Limited offers the traders and services loan scheme. This scheme is suitable for all the general business community as well as the MSME unit that needs funding for the working capital and other business related funding necessities. This scheme offers a loan up to Rs. 50 lakhs with interest on diminishing balance. In this article, we will look at the TMB Traders and Services Scheme in detail.
Know more about the Bank Loan for Startup Business
Purpose of the Scheme
The TMB Traders and Services Scheme can be obtained to meet the working capital requirements (including the construction of shop, office building, interiors) relating to the business of Retail and Whole Sale Traders Micro and Small (Service) Enterprises, Small Business, Professional and Self Employed persons.
Following persons can get the Loan under the TMB Traders and Services Scheme:
- Any individual
- Hindu Undivided Family
- Proprietary Concern
- Partnership firms
- Limited Liability Partnership firms
- Private Limited Company engaged in any trading or Service activity
Note: However, on account of individual partners/directors having separate businesses either singly or in association with others, the bank may extend credit limits to such companies based on eligibility and merits.
Nature of Advance
The Tamil Nadu Mercantile Bank Limited offers the following types of Loan under the TMB Traders and Services Scheme:
- Term Loan or Demand Loan for capex relating to the trade or service and for working capital
- Overdraft (Running /Operative account), this type of loam is renewable every year
- The TMB also offers Overdraft for working capital purpose
The trader can get up to a maximum of Rs. 50 Lakhs as a loan under the TMB Traders and Services Scheme
The repayment period will be fixed based on the income generation of the borrower (individual/concern/ firm / Company).
|Term Loan (capex)||84 months|
Demand Loan (Business /WC purpose)
|3||Term Loan (Business /WC purpose)|
60 months (subject to review every year)
|Overdraft (Reducing balance method)||For fresh loans – not exceeding 60 months (subject to review every year)|
|5||Overdraft (running facility)|
One year (subject to renewal every year well before the due date)
Obtention of Financial Statements
Obtaining the financial statement is not compulsory for exposure up to Rs. 25 Lakhs under the TMB Traders and Services Scheme. However, if the borrower is eligible for mandatory statutory Audit, the same has to be obtained and analysed.
In case the financial statements are not available repayment of the Debt and interest will be assessed by getting details of existing income as well as future income of the loan applicant.
Primary: For Term Loan (capex)
- An asset to be purchased or created (including building to be constructed) out of TMB Bank Term Loan or Demand Loan (DL) and collateral as shown below.
- For WCDL, Business purpose Term Loan (BPTL) / Over Draft for the working capital purpose: Hypothecation of Stock or Book Debt.
Agricultural lands will not be taken as collateral security. If the land is located at Metro, Urban, Semi-urban and Rural Areas: House Plot, Land, building properties not less than 125% of the limits.
In case the Term Loan or Demand Loan is sanctioned for the construction purposes the total value of primary security after construction will not be less than 150% of the Loan sanctioned, if it is less than 150% then additional security will be obtained to cover at least 150%).
Primary Security of Fixed Assets acquired under the Tamil Nadu Mercantile Bank Limited Finance should be insured.
Rate of Interest
One year MCLR plus Credit Risk Premium have to be provided for TMB Traders and Services Scheme
Credit Risk Premium
- For limits up to 25 lakh Credit Risk Premium – 50 bps
- For limits above 25 lakh – As per Credit Rating
For Business Strategy Spread up to Rs. 10 lakh – 175 bps and Business Strategy above Rs. 10 lakh – 150 bps have to be paid.
The rates of Interest for Marginal Cost of Funds based Lending Rate based interest rates are given in the document below. For further details, please contact the Tamil Nadu Mercantile Bank Limited’s nearest branch.
- The applicant needs to pay 20% of the amount for Term loan/ Demand Loan, while the Tamil Nadu Mercantile Bank Limited pays the rest.
- There is no margin for WCTL / WCDL / OD (WC)
Any irregularity or default in repayment of the Loan will attract a penal interest of 1.00% per annum over and the above rate of interest on the balance outstanding.
Following documents need to be provided for obtaining Loan under the TMB Traders and Services Scheme:
- Application from the applicant in Form – 139 (Application for Financial Assistance to Retail Traders, Small Traders and Small Business).
- Details of collateral security offered
- Suitable personal guarantee of the third party
- The processing charge is 0.50% of the loan amount without any maximum cap in case of Term loan/ Demand Loan (Running Account.)
- 1.00% of the Over Draft Limit (Reducing Balance) without any maximum cap
The application procedure for the TMB Traders and Services Scheme is explained in detail below:
- The applicant needs to visit the nearest branch of Tamil Nadu Mercantile Bank Limited, and the Relationship Manager will guide the application process.
- The applicant can also contact the Tamil Nadu Mercantile Bank Limited and the bank Customer Care Executive will fix a service appointment with the Relationship Manager to help the applicant with the application process.
- The applicant needs to fill up the Form with the relevant details and documents. On verification of application form, the loan amount will be credited to the applicant’s account.
Note: All the above Terms and Conditions are subject to change, and sanctioning of the loans is at the discretion of the Tamil Nadu Mercantile Bank Limited. Goods and Service Tax (GST) on All Service Charges extra wherever applicable.