As the very title suggests, the loan under this category is provided for meeting the working capital requirements including shortfall in margin money for working capital. It is a medium term maturity loan.

Eligibility: Only those units which have been sanctioned/ disbursed term loan by the Corporation.

Limit for Loan:

Financing Parameters

COLLATERAL SECURITY:

HOW TO GO ABOUT AVAILING FINANCIAL ASSISTANCE UNDER WORKING CAPITAL TERM LOAN

The Client is required to submit an Application on the letter-head of the company along with Processing Charges & Service tax. The Application may be submitted at Head Office or Branch office or in the Business Meets, which are organized from time to time, along with following information:

• Balance sheets of the company for the last 3 years.
• Copy of the CMA data.
• Details of working capital limits sanctioned/availed from the Bank and credit reports.
• Details of collateral security being offered along with valuation thereof.
• Undertaking that the funds shall be used only for the working capital purposes.
• After receipt of proposal, the case is placed before the screening committee for acceptance for appraisal. Constitution of the BPC has been discussed earlier. The proposals accepted in the Business Meets chaired by MD/HSIIDC are not subject to ratification by BPC.

APPRAISAL OF THE PROPOSAL

A brief appraisal is carried, which is aimed at the following points:

• Justification for the working capital.
• Analysis of the performance of the unit.
• Credit record with other Institutions/Banks.
• Overall viability of the scheme.

VERIFICATION AND VALUATION OF COLLATERAL SECURITY

Procedure is same as under General Term Loan.

 DISBURSEMENT OF THE SANCTIONED ASSISTANCE

 The process of disbursement of loan starts with the acceptance of terms & conditions of sanction by the borrower as conveyed in the Sanction Letter and deposit of imprest money and Up-front Fee. The objective of Imprest Money and Up-front Fee has been explained earlier. Other requirements are as under:

 Legal Documentation: The details of Legal Documents required to be executed is supplied immediately after sanction. However, legal documents/ resolutions required before disbursement are briefly explained hereunder:

1.      Other requirements:

·         Resolutions

As discussed under General Term Loan

·         Other documents

As discussed under General Term Loan 

·         Details of stamp papers (Non-judicial) for various documents ( to be purchased from Haryana only)

·         Stamp paper for INR 10.00 in the name of company for loan agreement.

·        Stamp paper for INR 10.00 in the name of company for undertaking.

·        Stamp paper for INR 15.00 in the joint name of all guarantors for guarantee bond.

·        Stamp paper for INR 10.00 in the name of owner of collateral security for declaration and undertaking.

·         In case of creation/ extension of charge on existing fixed assets of the Company, the following stamp papers are required.

·         Stamp paper for INR 10.00 in the name of authorised Director/Managing Director (with co’s name) authorised to create mortgage and for declaration & undertaking.

·         Stamp paper for INR 300.00 in the name of company for power of attorney.

·         Stamp paper for INR 10.00 in the name of company for letter of undertaking.

 Forms 8 is required to be filed with the Registrar of   Companies immediately after execution of legal documents and proof of filing to be furnished to the Corporation together with original receipt issued by  Registrar of Companies.

• Deposit of imprest money which is INR 25000/- for loan up to INR 150.00 lakh;
• Deposit of Up-front fee @ 0.5% of loan amount
• Compliance with the terms of sanction;
• Valuation and verification of collateral security, if any;
• Insurance of assets already created/mortgaged for the said loan;

 For subsequent disbursements, the steps under legal documentation are not repeated except for charge registration, if pending.