General purpose term loan for SME constituents Viz., for R & D activity, marketing and advertisement expenses Purchase of machineries / equipments, Preliminary expenses etc.
Proprietorship / Partnership firms, Limited Companies falling within the new definition of SME, engaged in the business for the past 3 years with audited financial statement of accounts
Nature of facility
- Term Loan.
- The safety of this advance will substantially depend on cash flow arising out of activity being financed. It should be ensured that the profits generated / anticipated to be generated turns into liquid cash to service the loan.
- Primary: Hypothecation of assets or mortgage of land , if loan is considered for that purpose. If no assets are created then it should be treated as clean
- Collateral: EQM or Registered Mortgage of Residential / commercial property (1st charge) either of borrower or of guarantor. However following conditions with regard to property under offer should be fulfilled:
- It should not be an agricultural property
- It should not be a vacant land
Assets charged to the Bank to be comprehensively insured covering various risks including civil commotions and riots. The policies should be renewed from time to time and copy retained on branch record. Bank’s interest to be got noted in the insurance policy. Separate insurance policy to be obtained for the mortgaged property.