Long Term Finance

Term Loan is generally taken by company for purchase of machinery/construction factory building and same results in creation of fixed assets. The term loans are normally availed by the company for Expansion or for Green field project. The repayment tenor the Term Loan for SME and Mid corporate companies is in the range of 3 to 7 years. The banker can fund up to 75 % of the cost of project/expansion while the balance funding needs to be brought in by the promoters.

While taking term Loan company has to submit following details to lenders:

1.     Project report affirming technical and financial viability of the project.
2.      Cost of project breakups mentioning cost of land, site development, building shed, Plant and machinery. 
3.      Means of Finance mentioning Promoters contribution, Loan required and quasi Equity/ Unsecured loan.
4.      Projections showing repayment capacity of borrower.
5.      Securities to be offered.

       Banker asses funding proposal based of following set of data:

  • Last 3 years Balance sheets to ascertain financial strength.
  • KYC documents to check identity and CIBIL records of borrower.
  • Promoters Background, Education and past experience.
  • Security to be offered. Primary and collateral and value of the same
  • Business profile and industry profile.
  • Bank statement to ascertain banking conduct and routing of Turn Over