Finance to Start-ups (MSME UDAAN)

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Finance to Start-ups (MSME UDAAN)

Objective/ Purpose :To provide financial assistance to Start-ups in MSME for their various requirements as below:

  • 1. Prototype creation, product / website / app development
  • 2. Team hiring
  • 3. Legal and consulting services
  • 4. Raw material and equipment’s
  • 5. Licenses and certifications
  • 6. Marketing and Sales
  • 7. Purchase / Leasing of Office spaces and administrative expenses

Features

  • Target Group :
    • Start-ups which are classified as MSME and registered with / recognised by DPIIT, Govt. of India.
    • Start-ups having sustainable business model & established Proof of Concept (a general approach that involves testing a certain assumption in order to obtain confirmation that the idea is feasible, viable and applicable in practice)
    The Start-up should have the support of recognized Incubator / Accelerator / Investors, available as per the Start-up India portal.
  • Facilities Available :Term Loan, Working Capital (fund based/ non-fund based / CEL)
  • Quantum of Loan:Maximum: Rs.50 Crores, categorised into two:
    1. i. Upto Rs.50 lakhs
    2. ii. >50 lakhs – 50 Crs
  • Pricing : Attractive Interest rates based on rating of the Borrower/ External Rating or as per Scheme Specific Rating (if applicable) or as per extant guidelines of the Bank.
    EBR (Linked to Repo Rate and Currently EBR is Repo Rate + 2.65%) linked (for MSMEs) & 6 months MCLR linked (for Non-MSMEs)
  • Borrower's Margin / Contribution :
    • Loans upto Rs.10 lakhs – NIL
    • Loans above Rs.10 lakhs
    • Term Loan: As per the Debt: Equity specified under the Product.
    • Working Capital: Min. 25% on Stocks & Receivables, if any.

  • Repayment Period:

    • Door-to-Door repayment shall be 120 months (Maximum) including moratorium period.
    • Bullet repayment may be allowed.
  • Processing Fee/ Upfront Fee :As per Bank's extant guidelines
  • Other Charges :NA

  • Special Feature :

    • Financing under the Product will be done only by select Branches (to be identified and authorised by the Circle).
    • The Start-up accounts which have been financed so far under Bank’s usual credit dispensation shall be migrated to the identified / designated Start-up Branches, so as to offer dedicated value added services and cater to the entire value chain / ecosystem.

Eligibility

  • The Start-up should be registered as MSME having valid Udyam Registration Certificate.
  • The Start-up should be registered with / recognized by DPIIT, Government of India, with the following characteristics:
    • Constitution: Public or Private Limited Company, Registered Partnership, or a Limited Liability Partnership.
    • Age: Up to 10 years from the date of incorporation/registration
    • Turnover: Not to exceed Rs.100 crores in any of the Financial Years after incorporation / registration.
    • Attributes: Working towards innovation, development or improvement of products/processes/services or if it is scalable business model with high potential of employment generation or wealth creation.
    • Others: Should not have been formed by splitting or reconstructing an already existing business.
  • The Start-up should have the support of recognized Incubator / Accelerator / Investors, available as per the Start-up India portal.
  • The equity portion of Start-up shall be fully tied-up.

Terms & Conditions 

  • Primary Security:
    • Hypothecation of Assets financed by the Bank.
    • Hypothecation of Stocks & Receivables
    • Charge on Intellectual Property Rights (if financed by Bank).
    • Right /Lien on all Products/Patents/Copyrights and Results created out of Bank Finance, in consultation with empanelled reputed Law Firm / Law Dept. of the Bank.
  • Collateral Security:
    a) Loans upto Rs.50 lakhs:
    • To be covered under CGTMSE / CGSS
    • If CGTMSE / CGSS coverage is not available, Min. 25% tangible collateral security to be obtained.
    b) Loans > Rs.50 lakhs – 50 Crores:
    • Alternative Investment Fund (AIF) investment is compulsory
    • To be covered under CGTMSE / CGSS
    • If CGTMSE / CGSS coverage is not available, Min. 25% tangible collateral security to be obtained
  • Guarantee: Personal Guarantee of all Promoters
  • Processing charges: NIL
  • Inspection fees / Commitment charges / Pre-payment charges: NIL

Last Updated On : Thursday, 08-02-2024

Interest Rates

8.00%* p.a. onwards

w.e.f. 15.04.2025

*T&C Apply.

 

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