UCO Bank

Finance to Micro & Small Enterprises

Finance to Micro & Small Enterprises

SME Finance takes care of the funding needs of Micro & Small Entrepreneurs. Keeping in view the specific requirements of these units, UCO Bank has introduced a range of products at attractive rate of interests. The Bank also provides collateral free loans upto Rs 100 lakh under SME.

Title of the Product UCO Roop Sangam
Scope of Coverage All Branches
Objective : This scheme is specially designed to encourage and empower women entrepreneurs by offering hassle free financial assistance for undertaking their own economic activities under Micro & Small Enterprise Sector.
Sector Priority Sector
Type of facilities Term Loan & Cash Credit
Eligibility criteria for borrower
  • Any woman individually or any unit set up by a group of women.
  • Partnership Firm in partnership with other women/ men where the major share in the partnership is of women partner(s)
  • Private Limited Company with major share of Capital being held by Women.
  • The borrowing concern should exclusively deal with our Bank.
  • Not defaulter to any Bank/Financial institution.
  • Age Minimum 20 years, Maximum 60 Years.
  Preference will be given to the following categories of entrepreneurs:
  • Entrepreneurs trained in R-SETIs or any other approved training institute.
Assessment criteria:
  • Borrower should have own premises for Parlour or should have leased or rented premises having unexpired period of lease/rent agreement covering the repayment period.
  • Borrower should have at least cash in hand/bank balance to the extent of margin requirement.
  • Necessary registration under Shop & Establishment Act and all other statutory licenses/permission from the competent authority.
  • In case of existing establishment last 2 years balance sheet and projections for next 2 years for working capital finance along with profitability and it should be profit earning for last 2 years.
  • In case of new establishment projections for next 2 years for working capital finance along with profitability.
Category : Micro and Small Enterprises (MSE) under MUDRA.
Purpose
  • For acquisition of fixed assets (Equipments, Furniture and Fixtures, Tools, etc.)
  • To meet working capital needs.
Experience The prospective borrowers should preferably have working skill / experience in the intended line of business.
Quantum of Finance Max: Rs 10.00 Lacs
Out of which WC not to exceed Rs.3.00 lac
Assessment of Loan
  • Term Loan: Need Based.
  • Working Capital: 20% of the projected realistic annual turnover.
Margin Up to Limit Rs 50000:   Nil
Limit above Rs 50000 and up to Rs 10.00 lacs: 15%
(If the application is sponsored from any Govt. Agency, Subsidy if available will be treated as Margin)
Rate of Interest MCLR +0.15%=9.60% wef 11.08.2016
Penal Interest As per extant guideline of the Bank from time to time.
Processing Charges Up to Rs. 5.00 lakhs: Nil.
Above Rs.5 lac up to Rs.10 lac: Rs. 363 per lakh.(+ ST changes)
Security Primary Security - Hypothecation of assets created out of Banks loan
Collateral Security - No collateral or Third Party Guarantee is to be taken.
Guarantee - Personal Guarantee of the borrower
Guarantee Coverage To be covered under guarantee coverage of CGTMSE/ Credit Guarantee Fund of Mudra.
Period of loan and terms of repayment Term Loan:  5-7 Years in EMI excluding moratorium (maximum 6 months) based on life   of assets, income generation of the project and subsistence of the borrower.
Cash Credit: 12 months, it should be in continuing nature subject to review and renewal every year.
Insurance The assets financed by the Bank are to be got comprehensively insured under Bank's agreed clause and the cost of insurance is to be borne by the borrower.

Trade LoanIt is a loan for financing working capital and Term Loan needs of Retail and Wholesale traders.

Eligibility

Existing enterprises engaged in business for at least 2 years and earning profit during the last 2 years.

New trading units as well as units which have not completed two years can be financed maximum upto Rs.10 lacs.

Borrower

Individual, Proprietorship, Limited Company (public/private), HUF, Borrowing concern should deal exclusively with our Bank only.

Quantum of loan

Any Amount from Rs. 1 Lac to Maximum Rs 200 Lacs.

Credit Facilities

Fund Based:-Term loan upto Rs. 25 lacs for acquisition of Fixed Assets.

Non-Fund Based:-inland L/C-DP or DA with usance period not exceeding 90 days.

INLAND BG:-validity period upto 1 yr. including claim.

Margin
  • No margin is required for Cash Credit in case of existing units & 20/25% for new units while computing drawing power
  • Margin for Term Loan, LC & BG is 25%
  • Application is simple; Balance Sheet is not required for limit up to Rs 10 lac and not compulsory for limit below Rs 50 lac subject to certain conditions.
Limits (Least of the followings)
  • 60% on realizable market value of immovable property, and/or
  • 90% on FDR (if limit is sought above 60% of project value,
  • 85% on surrender value of LIC Policies, NSCs & Govt. Bonds(if it is sought as additional limit),

OR

20% of gross Annual sales(existing units) as reflected in last Sales Tax Assessment order/Sales Tax return/VAT Assessment Order or Return/Service Tax Assessment Order or Return/Declaration given by borrower, whichever is less.

Security
  • Primary-Hypothecation of stocks, book debts & Fixed Assets for existing units making profit at least for last two years.
  • Collateral Equitable Mortgage of Land & Building, Assignment of LIC policy, Lien, Pledge/Assignment of KVP, NSC, Bank's own FDR, Govt./RBI Bonds.

Click here for rate of Interest :

Guarantee
  • By owners of immovable properties offered as collateral security,
  • By Karta & all major coparceners of HUF,
  • By all partners of the firm(in case of partnership firm),
  • By all Directors of the company (in case of Limited company)

Processing Charges- 0.50% of fund based limit, 0.25% of Non-Fund based limit.
Maximum-Rs.20000/-.

 

In terms of MSMED Act, 2006 the MSE(Micro & Small Enterprises) segment is broadly classified as under:

Particulars Original Investment in Plant & Machineries of Manufacturing Enterprises Original investment in equipment of Service Sector Enterprises
Micro Enterprises Upto Rs. 25.00 lakh Upto Rs. 10.00 lakh
Small Enterprises Above Rs. 25.00 lakh and upto Rs. 500.00 lakh Above Rs. 10.00 lakh and upto Rs. 200.00 lakh

CATEGORIZATION OF ACTIVITIES UNDER MANUFACTURING OR SERVICES UNDER THE MSMED ACT 2006

MSE-Manufacturing MSE-Services
Loans given to enterprises engaged in the manufacture or production, processing or preservation of goods in general including the following :

 

  • Printing
  • Printing and publishing as integrated unit.
  • Medical Equipment and Ayurvedic Product
  • Composite unit of Bacon Processing and Piggy Farm

(The activity of Bee Keeping is farming allied activity and therefore, would not be covered in either manufacturing and service activity

Piggery farm without bacon processing shall not be classified either as manufacturing or as service enterprise because this is a farming activity)

  • Beedi/Cigarette Manufacturing and other tobacco products.
  • Extraction of Agave sprit from Agave juice (imported medicinal plant) extraction of Agave
  • Manufacture of Bio Fertilizer
  • Tobacco Processing.

 

 Loans given to enterprises engaged in providing or rendering of services in general including the following :

 

  • Small Road and Water Transport Operators.
  • Small Business
  • Professional & Self-employed persons,
  • And other service enterprises engaged in activities, viz,
    • Consultancy Services including management services
    • Composite Broker Services in risk and insurance management
    • Seed grading services
    • Training-cum-Incubator centre
    • Educational Institutions
    • Training Institutes
    • Retail Trade
    • Practice of law i.e. legal services
    • Trading in medical instruments (brand new)
    • Placement and Management Consultancy Services
    • Advertising Agency and
  • Publishing.
  • Sanitation Services (Hiring of
  • Septic tank cleaner)
  • Clinical/Pathological Laboratories
  • and Scanning, MRI tests.
  • Hospitals
  • Agri-clinic and agri-business.
  • Restaurant with Bar
  • Canteens
  • Hotels
  • Motel Industry
  • Renting of Agriculture Machinery
  • (Harvesting)
  • Composite Broker Services in Risk and Insurance Management
  • Third Party Administration (TPA) Services for Medical Insurance Claims.
  • Training-cum-Incubator Centre
  • Placement and management consultancy services
  • Advertising Agencies and Training Centres.
  • Separation of iron scraps from slag pots.
  • Generation of electricity though windmill.
  • Development of Software and providing software services
  • Seed processing (for genetic enhancement), (involving collection of germ plasm, cleaning, gravity separation, chemical treatment etc.)
  • Composite unit of Poultry with Chicken (Meat) Processing { Poultry Farm without chicken (Meat) processing shall not be classified either as manufacturing or as service enterprise because this is a farming activity}
  • Medical Transcription Service.
  • Production of T.V. Serial and other T.V. Programmes,
  • Ripening of Raw Fruits under controlled conditions,
    [Subject to norms prescribed by Food Safety and Standards Authority of India, (Ministry of Health and Family Welfare, Government of India)]
  • Service rating Agency,
  • (Rating and grading services across sectors based on set methodology and standards)
  • Advertising Agencies
  • Marketing Consultancies
  • Industrial Consultancies
  • Equipment Rental and Leasing
  • Typing Centers
  • Photo copying Centers
  • Industrial R &D Labs
  • Industrial Testing Labs
  • Desktop Publishing
  • Setting up of Cyber Cafes
  • Auto Repairs Services and Garages
  • Documentary Films on themes like family planning, social forestry, energy conservation, commercial advertising.
  • Laboratories engaged in testing of Raw Materials and Finished Products.
  • Servicing Industry undertakings engaged in maintenance, repairs, testing or servicing of all types of vehicles and machinery of any description including electronics/electrical equipments/instruments i.e.
    measuring/control instruments, television, Tape Recorder, VCR, Radios, transformers, motors,
    watches etc.
  • Laundry and Dry Cleaning
  • X-Ray clinic
  • Tailoring
  • Servicing of agriculture farm equipment e.g. tractor, pumps, rig, boring machines etc.
  • Weigh Bridge
  • Photographic Lab
  • Blue Printing and enlargement of drawing/ Design Facilities
  • ISD/STD Booths
  • Tele Printers/FAX services 10
  • Sub-Contracting Exchanges (SCXs) established by industry associations.
  • EDP institutes established by voluntary associations/non-government organization.
  • Color and Black and White studios equipped with processing laboratories
  • Ropeways in hilly areas.
  • Installation and operation of cable TV Network
  • Operating EPBAX underfranchisee.
  • Beauty Parlors and Crèches.

The above list is illustrative and not exhaustive. For further Information please contact nearest Branch

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