Equipment Finance Scheme
Short/Medium Term Loan Funds are provided quickly under a simplified procedure to
well established small and medium scale industries for acquisition of indigenous as well
as imported capital goods.
This assistance is available for purchase of identifiable items of "New" plant
and machinery for modernisation/expansion/balancing/replacement or for any other purpose,
except for setting up a new project.
Assistance under this scheme is available to existing industrial concerns with a good
performance record and sound financial position.
They should
- Have been in operation for at least four years
- Have earned profits and/or declared dividend on equity shares during the
preceding two financial years, and
- Not be in default to institutions/banks in the payment of their dues.
The borrowing concern can avail upto a maximum of 77.5% of the cost of equipment as loan
under this scheme, subject to having an overall debt equity ratio on implementation of the
scheme within the prevailing norms. The loan will however be limited to Rs. 300 lakhs for
sanction at one time, subject to an overall ceiling limit of Rs. 400 lakhs per company.
The period of loan repayment ranges from two-five years, including a moratorium of upto
one year.
The loan is expected to be utilised soon after sanction but within four-six months. Amount
not utilized for more than six months would lapse. Security is expected by way of
exclusive hypothecation of the capital goods proposed/financed, with or without
first/second charge on other existing fixed assets.
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