Objective

To extend financial assistance to the following types of customers.

 i.   New units: Term Loan & WCTL assistance is considered. WCTL upto Rs.100 lakhs shall be considered for new units and the WCTL amount sanctioned shall not exceed the least of the Term Loan component financed by TIIC / fixed asset created. 

ii.   Existing assisted units (in existence less than 2 years) who are not in a position to tie up with banks / have not availed any working capital assistance from banks.

iii.   Qualified Professionals and other Service Sector viz. Hotels, Restaurants, Marketing of MSME products, Retail outlet of MSME/SME products and Cold Storage Units / Preservation of Goods.

iv.   MSME units undertaking Job work activity (exclusively undertaking Job works – not partly own manufacturing and partly Job work units).

Purpose

• For new units, TL shall be utilised for purchase of Fixed assets.
• The purpose of WCTL is to build up inventories, meeting the sundry creditors / debtors and to meet the additional Working Capital requirements. 

Eligibility

 i.   New units that have not availed any Working capital facility from the banks/financial institution.

ii.   Existing units (with or without bank finance) which undertake own Manufacturing and Job work units should and comply the following:

a)  Units should have earned cash profit for the last two financial years.

b)  The networth of the units should be positive.

c)  The units assisted by the corporation shall be in standard asset category for the last two financial years.

d)  Units which are having loans with the other Bank/FI’s should be in standard category with the respective institutions for the last two financial years as per CMR.

e)  The units should not come under the purview of sick unit definition.

f)   Those units which have been in existence for less than two years and have been set up with own fund / bank finance which approach TIIC for WCTL only, the same may also be considered. 

iii.   Under Service Sector, the following category of units are eligible:   

a)  Assistance under the scheme will be available to qualified professionals in the field of Management, Accountancy, Medicine, Architecture, Software Professionals and Engineering who has the basic degree/ professional qualification in their respective profession & MCA in respect of software professionals for setting up of their own business utilizing their professional skills.

b)  In respect of interior decorators in addition to basic degree in any discipline they should have completed certificate/ diploma course in interior decoration / designing having a course period of minimum one year from a reputed institution.

c)  Assistance in the form of Working Capital Term Loan will be considered to Hospitals, Hotels, Restaurants, Marketing of MSME products, Retail outlet of MSME/ SME products, Cold Storage units/ Preservation of Goods, which are in existence for the past 3 years with positive networth and continuous cash profit for the past 3 years. 

Quantum of Assistance

·     Minimum: Rs.10 lakhs.

·    Maximum: Rs.400 lakhs.

New Units: Upto Rs.100 lakhs restricted to the least of Term loan financed by TIIC or other financial institution/fixed assets proposed to be created or already created by the New Unit.

·      Existing Units: Rs.400 lakhs.

·      For Job work units & Service Sector, the maximum WCTL is restricted to Rs.50 lakhs. 

Promoters Contribution

25% of Working Capital assessed. 

Debt Equity Ratio

2:1 (overall)

The existing WCTL outstanding of TIIC shall be deducted from the existing debt since this component is adjusted from the proposed Flexi WCTL. 

Repayment Period

· For new units, Term loan is repayable in 7 years excluding the holiday period upto 1 years.

· WCTL:  An option to borrower to repay the loan after one year without any repayment of principal during the one year tenure will be now permitted. After one year period of sanction, the existing Flexi Working Capital Term Loan facility may be renewed and enhanced based on reappraisal by way of assessing the performance and eligibility arrived or the unit may decide to repay the loan in 30 instalments. 

Collateral Security

 i.   For TL component (New units): 50%

 ii.   WCTL component:

· Units with bank Finance (WC facility): 150%

· Units without bank Finance (WC facility): 125% 

Collateral security conditions:

1. Fixed deposit shall not be accepted.

2. Agricultural Land need not be considered.

3. Following third party collateral shall be accepted:  Grandfather/Grandmother/ Father/ Mother / Son/ Daughter/ Grandson/ Granddaughter/ Brother/ Sister/ Husband/ Wife/ Father in law/ Mother in law/ Brother in law/ Sister in law.

For all the WCTL Schemes, Delegation of power for accepting third party collateral:  

·   Third party collateral other than those covered under point no.3 in the collateral security conditions mentioned above shall be accepted for BSC proposals   with the approval of Regional Manager.

·   For other proposals it shall be accepted only with Head Office approval.