Working capital to grow your business :

New India Co-Operative Bank Limited offers traders, manufacturers working capital to meet the growing demands of their business. Working capital limits are an easy way to have funds on tap to meet emerging business opportunities or finance your consumables or any expansion activities.

Eligibility :

Working capital limits are offered to any individual/business enterprises engaged/proposing to engage in the business of manufacturing /wholesale or retail trading in any goods; or service providers such as tailors, interior decorators, contractors etc.
If the business is an existing one, it should have been in operation in the same line of activity for at least two years. 
In case of new proposition the person/s proposing to undertake activity should have either professional qualification or a good family background or experience of working in a similar firm for a minimum period of three years.

Extent of finance offered :
Category Finance offered Pre Conditions
New Venture Rs. 5 lacs.  
Trader or Manufacturer Rs. 10 lakhs Annual sales growth during the last 2-3 years is at least 20% and sales turnover of the last year is not less than Rs.50 lakhs.
  Rs. 25 lakhs Annual sales growth is 25% or more during the last 2-3 years and the sales turnover of last year exceeds Rs.1.00 crore as per the audited accounts.
  Other conditions for Term Loans 25% of cost of assets should be brought in by the borrower as his margin.
    Debt/Equity Ratio  of the business is at least 2:1
    DSCR is at least 1:5:1
Prime Security :

In case of  Cash Credit facility – the prime security will be Hypothecation of paid Stock or Book debts of reputed Companies.
Bill drawn on and accepted by reputed Companies or drawees of good repute.
Hypothecation  of assets financed by the Bank.

Collateral Security :

NSCs /KVPs/Life Insurance Policies/Bonds/Shares of reputed Companies/Other good Trustee/Securities  or Mortagage of immovable properties.

Margin :

Working Capital :

20-25% in case of stock in trade
20-30% in case of bills discounting
40-50% in case of Book Debts

Term Loan :

20-25% in case of purchase of gala/shop/machinery/equipment.
30-40% for purchase of furniture and fixtures.
40-50% in case of renovation and interior decoration

Margin  should be brought preferably by way of Capital. Unsecured Loan from the family members may be reckoned as margin.

Repayment :

In case of Working Capital facility, it will be reviewed/renewed on  yearly basis. In case of Medium/Long Term Loan , the loan should be repaid  in 72 months for purchase of premises and in case of others in 60 months.

Rate of Interest :

On request

Processing Charges :

0.50% of the loan Amount.
0.50% in case of renewal of Cash Credit

Legal/ Valuation Charges :

In case Colletral security is by way of Equitable Mortgage of shop/gala/flat the legal charges of Bank's Advocate and valuation fee of Bank's Valuer should be borne by the proponent.

Insurance :

The Securities such as stocks, vehicles, flat etc should be adequately insured covering applicable risks with Bank Clause at the cost of the proponent.

Other Conditions :

Working Capital facility may be granted by way of Cash Credit, Bills Discounting, Withdrawal against uncleared effects of the instruments presented in clearing, Bank Guarantee and Letter of Credit.
Premises in which the business is carried on should be on ownership or rental (Pagdi) basis. In exceptional circumstances, premises may be taken on Leave and License basis in which case the unexpired period of leave should be more than the period of loan.
Guarantee of two persons of good standing should be offered. They should be other than the family members/close relatives of the proponent.
Share linkage of 2.5% of the credit facility sanctioned.
The proponent should hold valid business licences, if any, required by law for the goods he is dealing with.