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Equipment Finance Scheme

Short/Medium Term Loan Funds are provided quickly under a simplified procedure to well established small and medium scale industries for acquisition of indigenous as well as imported capital goods.

This assistance is available for purchase of identifiable items of "New" plant and machinery for modernisation/expansion/balancing/replacement or for any other purpose, except for setting up a new project.

Assistance under this scheme is available to existing industrial concerns with a good performance record and sound financial position.

They should
- Have been in operation for at least four years
- Have earned profits and/or declared dividend on equity shares during the

  preceding two financial years, and
- Not be in default to institutions/banks in the payment of their dues.

The borrowing concern can avail upto a maximum of 77.5% of the cost of equipment as loan under this scheme, subject to having an overall debt equity ratio on implementation of the scheme within the prevailing norms. The loan will however be limited to Rs. 300 lakhs for sanction at one time, subject to an overall ceiling limit of Rs. 400 lakhs per company. The period of loan repayment ranges from two-five years, including a moratorium of upto one year.

The loan is expected to be utilised soon after sanction but within four-six months. Amount not utilized for more than six months would lapse. Security is expected by way of exclusive hypothecation of the capital goods proposed/financed, with or without first/second charge on other existing fixed assets.



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