Purpose – The loan is offered for traders
Margin – 20 % in case of cash credit and term loan
Amount of Loan – Maximum Rs.10 Lakh
Guarantee – one guarantor of sufficient means and standing, Personal guarantee of all partners or directors as the case may be.
Processing Fee – 0.5 % of loan amount subject to minimum of Rs 250/-
Repayment – Cash credit limit: Limit sanctioned for one year, subject to annual review or renewal
Term loan: Equated monthly installment subject to maximum 60 month.
Documentation – Like any other personal loan the bank requires the following document
Compulsory: Loan application form, Membership form (share money/ nominal fee), DPN, Letter of waiver, Letter of guarantee, Loan agreement
Optional:
- Continuing security letter (in case of overdraft/ cash credit a/c )
- Statement of stocks in case of cash credit
- Insurance cover for stock in trade
- Letter of hypothecation
- Equitable mortgage deed
- Assignment of policy/Pledge of term deposit receipt/NSC etc
- Personal guarantee of all partners, director if any
Rate of Interest – term loan-13.50% per annum; Overdraft-14.00% per annum
Security – Hypothecation of stock in trade & book debts, Collateral security in form of EQM, Pledge of liquid assets etc