Canara Bank Loan Scheme for Financing Start-ups

Looking for MSME Loan from Canara Bank for Financing Your start-up?

You have landed at the right place. This page contains all the information you will need on Canara Bank’s Business Loans for Financing Start-ups and Early Stage Units.

Canara Bank Business Loan Scheme for Financing Start-ups and Early Stage Units

This loan helps Start-ups and Early Stage Units (ESUs) meet their capital expenditure and working capital requirements. This is a need-based loan and the minimum loan amount for this loan is Rs. 10 lakh. The maximum loan amount is Rs. 2 crore for Start-ups and Rs. 5 crore for Early Stage Units.

Features of Loan Scheme for Financing Start-ups and Early Stage Units

Why this Loan?

  • The loan is meant for Start-ups and Early Stage Units in the Manufacturing and Services sectors promoted by or proposed to be promoted by graduates of reputed education institutions such as IIM, IIT, ISB, NIT, etc.
  • Start-ups and ESUs can avail this loan to meet their working capital and capital expenditure needs

Loan Amount

  • The minimum loan amount is Rs. 10 lakh
  • The maximum loan amount is Rs. 2 crore for Start-ups and Rs.5 crore for Early Stage Units

Interest

  • The bank offers a concession of 0.25% on the card rates applicable to MSMEs
  • Working Capital Loans up to Rs. 2 lakh: Repo Linked Lending Rate (RLLR) + 1.05%
  • Term Loans up to Rs. 50,000: RLLR + 1.30%
  • Term Loans from Rs. 50,000 up to Rs. 2 lakh: RLLR + 1.55%
  • All MSME Loans Above Rs. 2 lakh up to Rs 1 crore: Depends on the Credit Risk Rating
  • All MSME Loans Above Rs. 1 crore up to Rs 5 crore: Depends on the value of Immovable Property mortgaged, value of Approved Securities and/or Internal Risk Rating/Grade
  • All MSME Loans Above Rs. 5 crore: Depends on the External Risk Rating/Grade by External Assessment Institutes

Repayment

  • Loans up to Rs. 1 crore: These loans need to be repaid in 7 years after the moratorium period ends
  • Loans Above Rs. 1 crore: These loans need to be repaid in 7 years under regular circumstances or a maximum period of 10 years in special cases after the moratorium period ends
  • The repayment moratorium for this loan is not mentioned on the bank’s website. Please get in touch with the bank for details

Security Needed

  • The bank asks for CGTMSE coverage or Land/Building/Approved Securities/Bank Deposits worth 50% of the loan amount as security

Eligibility

  • The borrower should be between 20 and 50 years of age
  • The promoter must have graduated from one of the premier institutions from India such as IIMs, IITs, IISc, ISBs, XLRI, SIM-Pune, SIM- Bangalore, MDI-Gurgaon or NITs
  • The business must be a Start-up or Early Stage Unit. The ESU should not have completed 3 years from the date of commercial operation or balance sheet, whichever is earlier

Borrower Contribution to Total Cost (Margin Money)

  • Working Capital Loans: Minimum 25% of the total loan amount
  • Term Loans: Canara Bank requires you to contribute a 20% margin for these loans

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank covers the rest. So, if the total amount needed is Rs. 20 lakh, you will have to contribute 20% which comes to Rs. 4 lakh. The bank will provide the balance of Rs. 16 lakh

Processing Charges

  • The borrower must pay an upfront fee of Rs. 5,000 or 0.25% of the loan amount, whichever is higher

Service Charges

  • Loans up to Rs. 5 lakh: The bank does not levy service charges on Working Capital loans or Term-loans for loan amount up to Rs. 5 lakh
  • Loans above Rs. 5 lakh up to Rs. 1 crore: The borrower has to pay Rs. 100 per lakh of loan amount with a maximum of Rs. 10,000 for Working Capital Loans and 0.75% of loan amount with a maximum of Rs. 75,000 for Term Loans. The minimum service charge is Rs. 500 for Working Capital Loans and Rs. 3,750 for Term Loans
  • Loans Above Rs. 1 crore: The borrower has to pay Rs. 150 per lakh up to a maximum of Rs. 7.5 lakh for Working Capital Loans and 1% of loan amount up to a maximum of Rs. 7.5 lakh for Term Loans. The minimum service charge is Rs. 15,000 for Working Capital Loans

Documents Needed for Individuals

  • Loan Application Form duly filled and signed by the applicant and co-applicant, if any
  • Two Passport Size Photographs of applicant and co-applicant
  • Personal ID Proof: Aadhaar Card, PAN Card, Passport or Driving License. PAN Card/PAN Card Issuing Letter is must
  • Signature Proof: PAN Card, Banker’s Verification, Driving License or Passport
  • Residential Address Proof (Any One): Aadhaar Card, Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income/Banking Proof: Last 6 months Bank Account Statement of applicant and co-applicant, Loan Statement of Running Loans, Latest Closed Loan NOC, Net Worth of the applicant and co-applicant
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • A4 size copies of the aforementioned documents must be self-attested with blue ink

Documents Needed for Proprietorship and Partnership Firms

  • Loan Application Form duly filled and signed
  • Partnership Deed and Partnership Registration Certificate
  • ID Proof of the Firm: Firm PAN Card or PAN Issuing Letter
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income Proof: CMA Data and Project Report, Debtors and Creditors Certificate, GST Return, Last 3 years ITR of applicant and co-applicant, Audited or CA Certified Computation of Income/Trading Account/Profit and Loss Account/Balance Sheet, Annual Audit Report and Tax Audit Report if audited, Form 16A if applicable, Net Worth of applicants, co-applicants and guarantors
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Partnership’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References
  • All A4 size copies of the aforementioned documents must be self-attested with blue ink

Documents Needed for Private Limited and Public Limited Companies

  • Application Form duly filled and signed
  • Company ID Proof: Company’s PAN Card
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Business Proof: AOA and MOA, Company Incorporation Certificate, Business Commencement Certificate, Board Resolution, CA/CS verified Share Holding Pattern, ROC Annual Return, DIN Certificate, List of Directors on Company Letter Head, GST Number, Form 32 in case of Director Change
  • Income Proof: CMA Data and Project Report, Last 3 Years ITR Acknowledgement copy of Company and all Directors, Last 3 Years Annual Credit Report or Tax Audit Report with Article 3CB, Article 2D, Article 3CD, TDS Certificate/Form 16A, Net Worth Certificate
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Company’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References
  • All A4 size copies of the aforementioned documents must be self-attested with blue ink

Reference Facts

  • Canara Bank Website: www.canarabank.com, www.canaramsme.com (website for MSME) and www.canarabank.in (net banking)
  • Headquarters: Bengaluru, Karnataka
  • Call Centre Toll-Free Number: 1800 425 0018
  • Email for MSME Loans: [email protected]