Looking for MSME Loan Against Property from Canara Bank?

You have landed at the right place. This page contains all the information you will need on Canara Bank’s Canara MSME Credit Against Property (CAP) Loan Scheme.

Canara MSME Credit Against Property (CAP) Loan Scheme

This loan helps MSME businesses in the manufacturing and services sectors get a loan from Canara Bank against the security of unencumbered land and building belonging to the business/promoters of the business/close relatives of the promoters. The maximum loan amount for this loan is Rs. 10 crore for manufacturing units and Rs. 5 crore for service units.

Features of Canara MSME CAP Loan

Why this Loan?

  • The loan is meant for manufacturing and service units in the MSME sector to raise money for Working Capital or other needs against the security of property
  • The maximum loan amount for this loan is Rs. 10 crore for manufacturing units and Rs. 5 crore for service units

Loan Amount

  • The minimum loan amount is Rs. 10 lakh
  • The maximum loan amount is Rs. 10 crore for Manufacturing Units and Rs.5 crore for Service Units in the MSME sector

Interest

  • The interest rate for this loan is defined as “1-year MCLR of Canara Bank + Strategic Premium ranging from 1.55% to 2.30%“. The Strategic Premium applicable to each business is decided by the bank based on the internal risk rating of the borrower at the time of application

Repayment

  • These loans need to be repaid in a period of 5 to 10 years after the loan is taken
  • The working capital loan is tenable for one year as per the bank’s website
  • The repayment moratorium for this loan is not mentioned on the bank’s website. Please get in touch with the nearest Canara Bank branch for this information

Security Needed

  • The bank asks for a mortgage of immovable property worth 100% to 150% of the loan amount depending on the location of the property as security
  • Vacant land and agricultural property are not accepted as security

Eligibility

  • The business must be a manufacturing or service unit in the MSME category
  • The land and property for mortgage must be located in Metro, Urban, Semi-urban, select rural areas
  • Properties allotted by Govt. authorities, Semi-govt. authorities, Small Scale Development Authority, Industrial Development Authority and in SEZs are also eligible

Borrower Contribution to Total Cost (Margin Money)

  • Canara Bank takes 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.

Processing Charges

  • The borrower must pay 50%of the applicable processing charges

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 Rs. 10,000 for Working Capital Loans and 0.75% of loan amount up to 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 lakh up to Rs. 7.5 lakh for Working Capital Loans and 1% of loan amount up to 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]