Equipment Finance

Objective

For acquiring specific machinery/equipment

• Financially sound companies
• Should be in the operation for a period of 5 years, should be making profit for the last three years.
• Must have a good track record.

Exclusion

Assistance under the scheme will not be available for the following:

• Acquisition of second hand equipment/machinery
• In- house fabrication of equipment/ machinery
• Reimbursement of the cost of equipment/ machinery purchased more than 90 days prior to the date of application.
• Grass root projects or major/ expansion/ diversification, which call for detailed appraisal.

Nature of assistance: Rupee Term Loan

70% of cost of equipment plus taxes/duties, transportation and installation charges. Minimum: Rs.25 lakh  Maximum: Rs.10 Crore

Debt Equity Ratio: 1.5:1

Current ratio: 1.33:1

Interest coverage: 2:1

Interest rate:

Based on Prime Lending Rate fixed from time to time. Actual rate within the prevailing rate band depends upon creditworthiness of borrower and risk perception.

Repayment period: 3 to 6 years

Security:

Extension of first charge or hypothecation of assets financed. Personal guarantee/ Corporate guarantee

• Loan Agreement
• Deed of hypothecation
• Demand promissory note