Organisation : Industrial Investment Corporation Ltd
Scheme Name : Micro, Small Enterprises Funding Scheme
Applicable For : Tamil Nadu
Website : http://www.tiic.in/micro_funding.html
Micro, Small Enterprises Funding :
1. Scheme : The scheme is to extend financial assistance to New / Existing Units in Micro and Small Enterprises with overall project outlay of Rs.50.00 lakhs.
Related : TIIC My Doctor Scheme Tamil Nadu Industrial Investment Corporation : www.statusin.in/25305.html
2. Eligibility :
** New Enterprises in Micro / Small scale sector for manufacture, preservation or processing of goods irrespective of location and service sector projects like Hospitals, Fast Food restaurant etc. except Small Road Transport Operators [SRTOs].
** Existing Micro and Small Scale Industrial Units and Service Enterprises, undertaking Expansion, Modernization, Technology Upgradation and Diversification irrespective of locations.
3. Purpose : For Creation of Fixed Assets
4. Quantum of Loan :
** For New Units, term loan 80% of Project cost subject to a maximum of Rs.40.00 lakhs will be considered.
** For existing units, term loan of 75% of Project cost subject to a maximum of Rs.37.50 lakhs will be considered.
5. Project Cost : Project Cost shall not exceed Rs.50.00 lakhs in case of New Unit. In respect of existing units, Project Cost including existing project outlay shall not exceed Rs.50.00 lakhs
6. Promoter’s Contribution : The Minimum Promoter’s contribution shall be fixed at 20% of the project cost.
7. Debt Equity Ratio : DER for new Units is 4.00 : 1.00 and for existing units is 3.00 : 1.00.
8. Repayment Period : The loan repayment period shall not exceed 6 years including moratorium of 6 – 24 months.
9. Collateral Security : The collateral security offered shall be stipulated as per the existing policy guidelines.
FAQs :
1. Does TIIC help in the preparation of project reports for new entrepreneurs?
The TIIC provides necessary guidance and information for financing of the proposed project and also indicates the basic requirements expected in the project report.
Entrepreneurs may seek the assistance of organizations like ITCOT, TANSTIA F&F, MSME Development Institute, etc. for preparation of project report.
2. How much of the total project cost will you finance?
Depending on the line of activity 65% to 75% of the project cost (fixed assets like land, buildings and machinery) can be financed.
3. How much time will it take for sanction of loan?
After submission of the copies of necessary documents/papers such as unit’s land documents, building plan, machinery quotations, collateral documents, relevant approvals etc, TIIC considers loans subject to viability of the scheme, within 18 days if the loan is sanctioned at the Branch level and within 35 days if sanctioned at Head Office.
4. Do you consider Sanction of small loans?
As per prevailing norms we are considering financial assistance with a minimum quantum of Rs.5.00 lakhs and above for manufacturing sector.
5. What is the maximum limit for loan sanction?
The maximum sanction limit for proprietary / partnership concerns is Rs.15 crores and for private / public limited companies is Rs.30 crores. For Group Exposure the upper limit is Rs.30 crores for proprietary / partnership concern and Rs.40 crores for private / public limited companies.
6. Do you give loans only to MSME unit?
No. TIIC also considers financial assistance to large-scale units. However, 90% of our customers are from the MSME sector.
7. What are the criteria for sanction of loan?
TIIC sanctions loans to industrial units, service sector units like nursing homes, diagnostic centers, commercial complexes, hotels, transport operators, etc.
TIIC considers loans subject to DER norms i.e., 3:1 for the loans up to Rs.10.00lakhs and 2:1 for loans above Rs. 10.00 lakhs. The applicant shall offer collateral security ranging from 50% to 100% of the loan amount depending upon the type of the scheme.
8. How to apply?
The applicant has to submit the application (which can be obtained free of cost from TIIC Offices or downloaded from our website) along with a brief report about the project, availability of raw material, market tie-up if any etc. and experience of the promoter in that line and the security to be offered for the loan.
The Business Development Officer / Project Evaluation Officer at TIIC Branches will assist the entrepreneur in this regard.
9. How will the loan be disbursed?
After execution of loan security documents and on fulfilment of disbursement conditions such as investment of initial capital, submission of approvals, loan will be released on the value of assets acquired based on verification and valuation of assets by the TIIC officials / Empanelled valuers of TIIC.
10. What is the normal loan period for fixed assets loan? Is there any holiday period for repayment of loan?
The repayment period for Term Loans ranges from 5 years to 9 years. TIIC allows moratorium period ranging from 6 months to 2 years in the case of term loans. Loan period is fixed based on the Debt Service Coverage Ratio.
11. Can you consider financial assistance for retail trading and educational institutions?
As of now, TIIC is not considering financial assistance for retail trading except for retail pharmacies (Term Loan & Working Capital Term Loan). Educational institutions like schools and colleges, skill-training centers are not eligible for assistance.