Allahabad Bank MSME Loan

Allahabad Bank MSME Loan

Overview

Banks offer financial assistance to Micro, Small and Medium Enterprises (MSME) for business purposes like expansion, set-up of new business amongst others. Allahabad Bank offers MSME Loans to companies in both manufacturing and service sector. There are several types of loans offered by the bank under this category. MSME loans do not require any collateral security or third party guarantee up to Rs. 10 lacs. Allahabad Bank has 18 specialised branches and 82 thrust branches for offering financial assistance in this category.

List of Allahabad Bank MSME Loans

Allahabad Bank offers the following different schemes in the MSME Loans. More details on the schemes is outlined below.

1)Allahabad Bank Trade Finance Scheme

Allahabad Bank Trade Finance Scheme is available for traders who are individuals, firms, companies or co-operative societies involved in any lawful trading activities in both goods or services. This includes dry cleaning services, license to deal in petroleum products/LPG, auto service centres, xerox centres, ISD/STD/PCO booths etc. The loan helps the establishment to meet its day to day working capital requirements. Term loans are also available to acquire/construct premises, godowns, furnishing or repairing existing business premises or purchase of furniture and fixtures.

Credit facilities are offered up to Rs. 5 crores. The margins on this credit are:

• 25% on stocks
• 30% on receivables up to 90 days only
• 25% on term loan for equipment, tools, furniture & fixture, computer hard wares etc.
• 50% on term loan for acquiring or construction of premises
• 20% cash for letter of credit/bank guarantee

The security requirements for this loan are:

The repayment of the MSME loan varies from one year to 7 years depending on the nature of the loan taken. The bank charges a prepayment penalty of 2.28% of the outstanding balance of term loan in case of take over.

The rate of interest depends on the profile of the borrower and as assessed by the bank at the time of the application. It more or less varies from Base Rate to BR+0.5% per annum.

• Registration/License as applicable under Local Laws
• Should be engaged in the line of business for at least one financial year for which Income Tax Returns have been filed
• Aadhar Enabled Payment System (AEPS) for on-us and off-us transactions

2) Allahabad Bank Commercial Vehicle Finance Scheme

This scheme is available for all individual transport operators, firms, companies or association of people who are involved in the transportation business.

3) Finance to Doctors/Medical Practitioners for clinics/Nursing homes

This financing is available to Doctors/Medical Practitioners who could be individuals, partnership firms, limited companies, trusts etc. This loan can be utilised for construction of hospital buildings, hospital cum residence, setting up nursing homes, poly clinics, labs etc.

The amount of loan available is:

• Rural Branches: up to Rs. 100 lacs
• Semi-Rural Branches: Up to Rs. 200 lacs
• Urban/Metro Branches: Up to Rs. 500 lacs

The margin on the loan amount are:

• 35% for construction
• 25% on stocks
• 30% on receivables
• 20% on BG/LC

The collateral required for this loan is:

• Personal guarantee up to Rs. 10 lacs
• Suitable collateral security or CGTSME cover for Rs. 10 lacs and above

The repayment for working capital loan is on-demand, subject to review every year. For a term loan, the repayment period is 84 months including 18 months moratorium.

All doctors/medical practitioners (individuals, partnership firms, limited companies, trusts)

4) Allahabad Bank Artisan Credit Card (ACC) Scheme

This MSME scheme is available for existing artisans borrowers who can enjoy credit up to Rs. 2 lacs.

5) Allahabad Bank Weavers Credit Card (WCC) Scheme

The purpose of this loan is to serve the financing needs for weaving activity and ancillary workers involved in weaving activity.

The loan limit is based on the working capital requirements and the cost of tools and equipment required for carrying out weaving activity. The maximum amount offered to an individual is Rs. 2 lacs. There is no margin up to Rs. 25, 000 and 20% margin above Rs. 25,000.

The rate of interest on this scheme varies from Base Rate to BR+1.5% per annum with monthly rests.

Loan repayment depends on the type of loan taken. For working capital, it is on-demand subject to review every year. The WCC card that is issued has validity of 3 years. Term loan repayment period is 5 to 7 years.

• Weavers and ancillary workers involved in weaving activities
• Preference given to weavers identified under the Third Census of Handloom weavers conducted by Development Commissioner (Handlooms)
• All existing borrowers of the Bank enjoying credit facilities and have satisfactory dealing with the Bank

6) Allahabad Bank Laghu Udhyami Credit Card (LUCC) Scheme

The purpose of this loan is to provide working capital for the purchase of raw materials etc. A Term loan is also made available for the purchase of tools and equipment which helps in the production process.

The loan amount offered under this scheme is:

The rate of interest varies from time to time however ranges between base rate to BR+5% per annum with monthly rests. The collateral security required for this loan depends on the profile of the borrower and loan amount.

Repayment period for working capital loan is on demand, subject to review every year. The LUCC card is issued for 3 years. The repayment period for term loan is between 5 to 7 years.

All existing borrowers under Industries, Services & Business (ISB) sector for the last 3 years and enjoying credit limit up to Rs. 10 lacs.

7) Allahabad Bank Revised General Credit Card (GCC) Scheme

This scheme increases the flow to credit to individuals for entrepreneurial business in the non-farm sector provided through the General Credit Card. The loan amount is a maximum of Rs.25,000 per borrower. Term loan is available for the purchase of plant and machineries. Cash credit is available up to 20% of projected sales turnover.

Repayment period of term loan on door to door basis is 60 months. It will be repaid in 42-54 equal monthly principal instalments & interest to be repaid when due.

This loan is available for individuals involved in non-farm entrepreneurial sector. Preferential treatment is given to women under the revised GCC scheme.

How to apply for Allahabad Bank MSME Loan

The MSME loan with Allahabad Bank can be applied online as well as by visiting the nearest bank branch. When applied online, the application status can be tracked through the official website of Allahabad Bank. One can also request the bank to contact you regarding the loan. It is possible to check the loan eligibility online as well. This helps the applicant to understand the basic requirements, financial details and the working of the loan. The application form can also be downloaded from the website.

FAQs: Allahabad Bank MSME Loan

1.What are MSME loans?

Micro, Small and Medium Enterprises (MSME) offers financial assistance through loans to Micro, Small and Medium Businesses for expansion, meeting working capital needs or purchase of production equipment.

2. What are the different MSME schemes offered by Allahabad Bank?

• Allahabad Bank offers 7 different MSME schemes:
• Allahabad Bank Trade Finance Scheme
• Allahabad Bank Commercial Vehicle Finance Scheme
• Finance to Doctors/Medical Practitioners for clinics/Nursing homes
• Allahabad Bank Artisan Credit Card (ACC) Scheme
• Allahabad Bank Weavers Credit Card (WCC) Scheme
• Allahabad Bank Laghu Udhyami Credit Card Scheme
• Allahabad Bank Revised General Credit Card (GCC) Scheme

3. What is the maximum amount of loan available on Allahabad Bank Weavers Credit Card (WCC) Scheme?

The maximum loan amount available to an individual under this scheme is Rs. 2 lacs.

4. What is the Allahabad Bank Laghu Udhyami Credit Card Scheme?

Under this scheme, financial assistance is offered for providing working capital for the business. Term loan is also available for purchasing production tools or equipment for the process.