Small Business Loan for SME Contractors from Bank of India?

Get all the information you need on Star SME Contractor Credit Line from Bank of India below.

Bank of India BOI Star SME Contractor Credit Line

This loan helps MSME contractors and sub-contractors working on work on Civil, Mining, Transport, Electrical, Road, Irrigation, Pipeline and Construction projects meet their working capital needs. The maximum loan amount is Rs. 5 crore.

Features of BOI Star SME Contractor Credit Line

Why this Loan?

  • The loan is meant for contractors and sub-contractors to meet their Working Capital needs or to purchase equipment, machinery or vehicle
  • All contractors and sub-contractors who are classified as MSME and work on Civil, Mining, Transport, Electrical, Road, Irrigation, Pipeline and Construction projects are eligible for this loan
  • The maximum loan amount for the Bank of India SME Contractor Credit Line is Rs. 5 crore

Loan Amount

  • The minimum loan amount is Rs. 10 lakh. The maximum loan amount is Rs. 5 crore for this loan scheme

Interest

  • The interest rate for this loan scheme is defined as the sum of One-year Marginal Cost of Funds-based Lending Rate (MCLR) of Bank of India + Business Strategy Spread (BSS) + Strategic Premium. As of now, one-year MCLR of Bank of India is 7.35%, BSS is 0.25% and Strategic premium depends on different factors such as type of borrower, quantum of loan, credit risk rating of borrower, repayment term, etc.

Repayment & Moratorium

  • The repayment period and moratorium for this loan is not mentioned on the bank’s website. Please talk to the bank representatives when you apply

Security Needed

  • The bank asks for first charge of unencumbered assets (fixed and current) of the contractor
  • A collateral security is required since the bank mandates an asset cover of at least 1.5 to be maintained for this loan

Eligibility

  • MSME contractors and sub-contractors working on Civil, Mining, Transport, Electrical, Road, Irrigation, Pipeline and Construction projects are eligible for this loan
  • The MSME must have been in business for at least 3 years
  • The borrower must have a credit rating of SBS 5 or above

Borrower Contribution to Total Cost (Margin Money)

  • The bank charges minimum 20% of the total loan amount as margin

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank will cover 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

  • This information is not mentioned on the bank’s website. Please talk to a bank representative at the time of applying for this loan

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
  • Self-attested A4 size copies of the aforementioned documents

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
  • Self-attested A4 size copies of the aforementioned documents

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
  • Self-attested A4 size copies of the aforementioned documents

Reference Facts

  • Bank of India Website: www.bankofindia.com and www.bankofindia.co.in
  • Headquarters: Mumbai, Maharashtra
  • Call Centre Toll-Free Number: 1800 220 229, 1800 103 1906