Bank Of India MSME Loan

Bank of India MSME Loan

Bank of India is one of the top 5 public sector banks in India. It has been serving the Indian public since 1906 with various personal and commercial banking services. Their products are aimed at offering cost-effective financial processing to its customers.

The MSME sector in India is an important component of the economy. They provide huge employment opportunities to scores of Indians from the rural setup. Financing the MSME sector is one of the important functions of banks in India. The Government of India has various schemes for MSME Entrepreneurs that are executed through public sector banks spread in the rural landscape. Bank of India has its own set of MSME schemes aimed at these MSME enterprises that allow them to conduct business in a fair and hassle free manner.

1. Credit Linked Capital Subsidy (CLCS) component of Credit Linked Capital Subsidy and Technology Up-gradation scheme (CLCS-TUS)

• The scheme is sponsored by the Central Govt. of India
• It aims at facilitating technology to MSEs through institutional finance for inducing well-established and proven technologies in the specific sub-sector/products approved under the scheme
• Provides upfront subsidy of 15% on institutional credit up to Rs.1 crore
• Convenient online application and tracking system

2. Star MSME E-Rickshaw Finance

• This scheme aims at providing finance for transport operators under Micro category and to create employment opportunity
• Eligible persons include individuals, transport operators, associations, proprietorship firms & partnership firm
• These entities should have a valid license to operate e-rickshaws for passenger or goods transport
• Loan amount can be utilized to purchase new e-rickshaws and for one-time replacement of battery
• Extended in the form of a term loan
• Only one e-rickshaw can be funded at a time to an extent of Rs.5 lakhs
• A 15% margin on the invoice cost of the vehicle or 20% of on road price, whichever is higher
• Repayment tenure of 48 months, including a moratorium period of 1 month
• Hypothecation of the purchased vehicle serves as security
• Rate of interest currently at 01 year MCLR + BSS + 0.50% (CRP)

3. Star MSME GST Plus

• This scheme aims at providing Fund based or Non-fund based credit towards working capital requirements for trading or manufacturing business
• All units having a valid GSTIN and engaged in trading or manufacturing activities as classified under MSME will be eligible for this scheme
• Minimum loan amount of Rs.10 lakhs and a maximum of up to Rs.500 lakhs can be availed
• Margin of 25% on stocks and 40% on book debts

4. Star Weaver MUDRA Scheme

• This loan can be availed by handloom weavers
• Loan for the purpose of meeting working capital requirement & purchase of stocks
• Cash credit limit of minimum Rs.50,000 up to Rs.5 lakhs
• Term loans up to Rs.2 lakhs are offered
• Repayment tenure of 3 – 5 years in equated monthly or quarterly instalments
• Interest subsidy to be borne by Govt. of India at 6% and the remaining to be borne by the borrower
• Margin money of 20% of the project cost, subject to a maximum of Rs.10000 will be provided
• Annual review or renewal of the credit facility is undertaken
• Loans under Rs.50,000 shall be disbursed in the form of MUDRA card and in the form of cash credit account for loan amounts above Rs.50,000
• Rate of interest at 1-year MCLR + BSS + 1% (CRP) for loan amount of Rs.50,000 to Rs.2 lakhs and at 01-year MCLR + BSS + 2% (CRP) for above Rs.2 lakhs to Rs.5 lakhs

5. Star SME Education Plus

• Scheme specially for Educational Institutions viz., Universities, Colleges, Schools
• Loan amount to be utilized for construction/ renovation / repair of building and also for the purchase of computers, lab equipment, furniture & fixtures, books, etc.
• Approved and recognized institutions with a profit-making history of 2 years can apply
• New and upcoming institutions with proper reasons and justifications can also apply
• Extended as term loans of Rs.10 lakhs up to Rs.500 lakhs
• Repayment tenure of up to 8 years with an initial moratorium period of 12 to 18 months is allowed
• Minimum margin of 20%

6. Star Start-up Scheme

• Objective of the scheme is to fund start-ups approved by the Government
• All units certified as start-ups as per concerned government authority, registered as Private Ltd. Co., Registered Partnership Firm or a Limited Liability Partnership
• Purpose of the loan is to aid innovation, development, deployment or commercialization of a new product, process or service driven by technology or intellectual property
• Extended as term loans, working capital or non-fund based limit
• Minimum loan of Rs.10 lakhs up to Rs.5 crores
• Repayment tenure for working capital is at 12 months and term loans are given 120 months for repayment

7. Star Doctor’s Plus

• The scheme aims at aiding the financial requirement of medical practitioners and healthcare professionals
• Professionally qualified persons in the age group of 25 to 60 years with a registered Medical or Healthcare degree are eligible for the loan
• Individuals, Firms, Companies or Trusts engaged in providing medical, pathological, diagnostic & other healthcare services, where minimum 51% of shareholding is held by qualified practitioners can also apply for this loan
• The loan amount can be utilized for acquiring or construction of premises or building for a clinic, hospital or a healthcare facility
• Extended as a term loan repayable in 5-10 years period
• Rate of interest at 1.00% over 1-year MCLR (8.40%) + BSS (0.30%), presently at 9.70% p.a.
• Comes with free debit card and internet banking facility

8. Star SME Contractor Credit Line

• The scheme aims at taking care of the working capital needs of Civil Contractors, Mining Contractors, Engineering Contractors, Transport Contractors, etc., who are established as a Proprietorship, Partnership firms, Limited Companies
• Extended as Line of Credit in way of fund based working capital limit, Bank Guarantee & letters of credit
• Loan amount of minimum Rs.10 lakhs up to Rs.500 lakhs
• Margin of 20% for fund based credit and 15% for non-fund based facility

9. Star SME Auto Express

• The scheme provides finance for the purchase of transport vehicles to transport goods and services of SME units
• Educational institutions also eligible for transport vehicles for providing transportation services to students / faculty / staff
• Finance for purchase of new vehicles only
• Cost of chassis + body building costs + registration, insurance, road tax, accessories AMC etc.
• Extended as a term loan
• 80% of on road vehicle cost is offered as loan
• Repayment tenure of 84 months including moratorium of maximum 3 months

10. Star SME Liquid Plus

• Scheme is aimed at Proprietorships, Partnership firms & Limited Companies, falling under the purview of SMEs, engaged in business for the past 3 years with solid financial record
• The loan amount can be utilized for R & D activity, marketing and advertising expenses, purchase of machineries & equipment, preliminary expenses etc.
• Extended as a term loan
• Minimum loan amount of Rs.10 lakhs and a maximum of Rs.500 lakhs
• Repayment tenure of 84 months including moratorium of up to 12 months

11. SRTO Scheme

• Special scheme aimed at Small Road & Transport Operators
• Can be availed by individuals, Proprietorship or Partnership Firms, Limited Company, Trust, Societies
• Can be utilized to finance commercial vehicles / earthmoving equipment / excavators for commercial use and/or captive use
• Loan amount determined on cost of equipment or “on the road” cost of vehicle
• Extended as a term loan of up to 85% of the estimated cost
• Repayment within 5 to 7 years including a moratorium of 3 months

12. Star Laghu Udyami Samekit Loan

• The scheme is aimed at those Micro & Small Enterprises who require both working capital and term/demand loan.
• Extended as composite loan in the form of demand/term loan
• Ideal for Micro & Small Enterprises in rural, semi urban, urban and metro branches
• Quantum of loan
• Borrowers can avail up to 85% of the requirement as loan
• Repayment tenure of 5 years with a moratorium period of 3-6 months

13. Technology Upgradation Fund Scheme

• The Amended Technology Upgradation Fund Scheme (ATUFS) as notified by the Ministry of Textiles, Government of India
• ATUFS aims to promote ease of doing business and generate employment and promoting exports through “Make in India” with “Zero effect and Zero defect” in manufacturing
• The scheme will provide one time capital subsidy for investments in the employment and technology intensive segments of the textile value chain
• This benefit is available for the following recognized activities under the scheme -
  • Weaving, Weaving Preparatory and knitting.
  • Processing of fibres, yarns, fabrics, garments and made-ups.
  • Technical Textiles
  • Garment / made-up manufacturing
  • Handloom Sector
  • Silk Sector
  • Jute Sector

14. Pradhan Mantri Credit Scheme

• The scheme is in conjunction with the Government of India, Ministry of Textiles. It is named as Pradhan Mantri Credit Scheme for PowerLoom Weavers (PMCSP) under PowerTex India effective from 01.04.2017 to 31.03.2020
• The scheme provides financial assistance viz., margin money subsidy or interest reimbursement against credit facilities (term loans) availed under various Central Govt. schemes

How to apply for MSME Loans from Bank of India?

Bank of India allows customers to apply online for MSME Loans .The official website has the option to apply online for your MSME loan product. Customers can also approach their nearest branch for loan application. The following documents have to be submitted along with the duly filled application form.

• Identity Proof: Passport, driving licence, PAN card, Voter’s identity card
• Residence Proof: Passport, lease agreement, trade license, telephone and electricity bills, ration card and sales tax certificate
• Age Proof: Passport, Voter’s identity card, Photo PAN card
• Business registration proof
• Proprietor(s) PAN Card Copy
• Partnership deed copy
• Company PAN card copy
• P&L and balance sheet copy of last 2 years
• Sales tax documents
• Municipal tax document

FAQs: Bank of India MSME Loans

1. Does Bank of India require collateral for MSME Loans?

It is mandated by the RBI to not request for collateral security for loans below Rs.10 lakhs in the MSME sector. However, it has also allowed banks to increase this limit to up to Rs.25 lakhs based on the track record of the borrower. However, the requirement will be assessed on a case to case basis. Generally, hypothecation of stocks or the equipment purchased serves as security for the loans.

2. What is a Composite Loan?

A Composite Loan combines the needs working capital and term loans under a single window for deserving entrepreneurs.

3. What is the time frame taken by Bank of India for processing of MSME Loans?

MSME loans are usually processed between 4 – 20 business days.

4. What is classified as a Micro Enterprise?

Micro Enterprises have investment not exceeding Rs.25 lakhs in the manufacturing sector and not more than Rs.10 lakhs in the service sector.

5. Does Bank of India check my credit score while loan processing?

Yes, the bank looks into your credit score from a competent bureau while processing your loan application.