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STAND-BY LINE OF CREDIT (SLC) FOR WORKING CAPITAL REQUIREMENTS OF SMEs

Eligibility
Borrowers rated SBBJ-3 and above.

Quantum of finance
15% of the working capital facilities (Fund Based + Non-Fund Based) Maximum Rs.5.00 crores.

Sanction of the limit and assessment
Sanction of SLC is made on request for all eligible borrowers alongwith sanction of regular fund based/ non-fund based working capital finance by an authority having financial powers to sanction the aggregate of the regular credit limits and the SLC. No separate assessment / special justification is required for SLC.

Release of the Limit
The release of SLC is to be approved by the head of the branch.

SLC may be made available on the specific request of the borrower as stock limit, bills / receivable limit, letters of credit, bank guarantees limit for domestic operations / exports, depending on the need, after being satisfied about the requirement.

Fund based SLC should invariably be covered by eligible drawing power.

In case of SSI units, SLC is not to be released where the unit has utilized SME Smart Score facility or already availed special contingency loan facility.

Period
For a maximum period of 2 months at any one instance. No restriction on No. of occasions SLC may be made available in a calendar year.

Others
Upfront fee - 1%. No commitment charge.

STAND-BY LINE OF CREDIT (SLC) FOR MEDIUM TERM LOAN REQUIREMENTS OF SMEs

Purpose
To facilitate the borrower for expeditious implementation of expansion / modernization plan and firming up capital expenditure to avoid time/cost overrun and enable the borrower to negotiate better terms with suppliers of machinery.

Eligibility
The scheme is available to the existing SME units only.

Assessment
Limits will be restricted to 2 times 'the residual cash accruals of last year', subject to a maximum of Rs. 5 crores for Corporate borrowers and Rs. 2 crores for Non-Corporates."

The average gross DSCR inclusive of the repayments under the Stand-by Line of Credit (TL) to be sanctioned, shall not be below 1.75.

Margin
20% of the project outlay.

Period
Valid for a period of 12 months from the date of sanction. On expiry of 12 months, the undrawn portion will lapse.

Interest
Based on the risk rating of the unit.

STAND-BY LINE OF CREDIT (SLC) FOR TERM LOAN REQUIREMENTS OF SMEs

Facility
Term Loan facility for meeting capital funding requirements of the borrower.

Eligibility
SME borrowers rated SBBJ-1 & SBBJ-2.

The units should have existed for five years or should have earned profits during last three years.

Units with TOL/TNW in excess of 2.5 shall not be eligible.

Purpose
The loan to be considered for the following capital expenditure related with the regular business activity:

• Expansion and modernization.

• Investment in Research and Development.

• Installation of captive power plants and upgradation of technology.

• Alteration in lay out of factory/office.

• Acquisition of software, hardware, consumables, tools, jigs, fixtures etc.

• Purchase of cars, passenger cars for staff and other vehicles.

• Replacement of old machinery.

• Purchase of balancing equipments.

Quantum of Finance

• 2 times 'the residual cash accruals of last year' (non-operative income will not be reckoned for the purpose), subject to a maximum of Rs. 5 crores for Corporate borrowers and Rs. 2 crores for Non-Corporate borrowers.

• Average Gross DSCR inclusive of the repayment liability under the proposed STL should not be less than 1.75.

• The facility to be made available as Fund Based / or Non-Fund Based Limits (i.e. including establishment of LCs) ensuring that aggregate exposure does not exceed the overall STL limit.

Margin
20 %.

Repayment
In 5 years including the moratorium period.

Validity of Sanction
12 months from the date of sanction.

Frequency of Sanction
The facility may be sanctioned at the time of each review/renewal of working capital limits, based on a fresh assessment.

Security

Primary-

First charge on the specific assets created out of the Bank finance.

Collateral-

Extension of existing charge on the fixed/current assets of the units

Parri passu charge on all the fixed assets of the unit, if exclusive charge on assets created out of the Bank Finance is not possible.

Personal guarantee of Partners/promoter Directors of the unit.

Interest
As applicable to the credit risk rating of the unit.

Others
Up-front fee @ 1 %.