Looking for MSME Loan for Goods or Passenger Transport Operators from Canara Bank?

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Canara Bank Caravan Business Loan

This loan helps Goods and Passenger Transport Operators finance new vehicles for their business. The maximum loan amount is Rs. 5 crore. The interest rate for this loan is directly linked with the Internal Credit Risk Rating of the borrower.

Features of Canara Caravan Loan Scheme

Why this Loan?

  • The loan is meant for Goods or Passenger Transport Operators who are looking for financing for new vehicles for their business
  • The borrower can use this loan to purchase small, medium and heavy commercial vehicles as well as passenger vehicles

Loan Amount

  • The minimum loan amount is Rs. 25 lakh or purchase of a minimum of 5 new vehicles
  • The maximum loan amount is Rs.5 crore

Interest Rate & Concession

  • Canara bank offers concession on interest rate based on the Internal Credit Risk Rating of the borrower. For scores between 50% and 75%, the bank offers a concession of 0.50%. However, for scores above 75%, the bank offers a concession of 1% on interest rate to the borrower
  • Working Capital Loans up to Rs. 2 lakh: Repo Rate Linked Lending Rate (RLLR) + 1.05%. The concession is applied based on the Internal Credit Risk Rating of the borrower
  • Term Loans up to Rs. 50,000: RLLR + 1.30%. The concession is applied based on the Internal Credit Risk Rating of the borrower
  • Term Loans from Rs. 50,000 up to Rs. 2 lakh: RLLR + 1.55%. The concession is applied based on the Internal Credit Risk Rating of the borrower
  • 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

  • These loans need to be repaid within 5 years inclusive of the moratorium period
  • As of February 2020, the repayment holiday (aka moratorium period) is not mentioned on the bank’s website

Security Needed

  • The bank asks for hypothecation of the vehicle(s) financed by the bank under this scheme as primary security
  • Collateral such as Land and/or Buildings that are equivalent to at least 25% of the loan amount is also required to avail this loan

Eligibility

  • The transport operators applying for this loan must have at least 3 years of experience in the transport operator business
  • The loan can be availed for the purchase of minimum 5 new vehicles or loan amount of Rs. 25 lakh
  • The borrower should have the necessary national/state route permits and other necessary licenses, permits and approvals to be eligible for this loan

Borrower Contribution to Total Cost (Margin Money)

  • Internal Credit Risk Rating Between 40% and75%: The bank charges 10% of the cost of chassis, 45% of the cost of the body, 15% of the cost of a fully built model and at least 50% of the cost of insurance and registration cost as margin
  • Internal Credit Risk Rating Above 75%: The bank charges 5% of the cost of chassis, 40% of the cost of the body and 10% of the cost of a fully built model and at least 50% of the cost of insurance and registration cost as margin

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

Processing and Other Charges

  • As of February 2020, the information on processing charges is not mentioned on the bank’s website. Please talk with the bank representatives when you apply

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 up to a maximum of Rs. 10,000 for Working Capital Loans and 0.75% of loan amount up to 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]