Looking for MSME Loan from Canara Bank?

You have landed at the right place. This page contains all the information you will need on Canara Bank’s Business Loans for Financing Working Capital for manufacturing units in the MSME sector.

Canara Bank Business Loan Scheme for Manufacturing Units in the MSME Sector

This loan helps manufacturing businesses in the Micro, Small and Medium Enterprises (MSME) sector to meet their working capital requirements. The maximum loan amount for this loan is Rs. 3 crore.

Features of Canara OD-MSME Loan Scheme (Manufacturing)

Why this Loan?

  • The loan is meant for manufacturing units falling under the MSME sector as defined by the MSMED Act, 2006 and which are engaged in an industrial activity
  • This loan is provided in the form of running limit to borrowers to meet their Working Capital needs

Loan Amount

  • The maximum loan amount is Rs. 3 crore under this loan scheme

Interest

  • Working Capital Loans up to Rs. 2 lakh: Repo Linked Lending Rate (RLLR) + 1.05%. As of February 2020, RLLR of Canara Bank is 8.05% bringing the effective interest rate to 9.10%
  • Term Loans up to Rs. 50,000: RLLR + 1.30%. This means as of February 2020, the effective interest rate is 9.35%
  • Term Loans from Rs. 50,000 up to Rs. 2 lakh: RLLR + 1.55%. As of February 2020, this makes the effective interest rate 9.60%
  • 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 within2 years

Security Needed

  • The bank asks for hypothecation of stocks and/or book debts equivalent to the liability
  • Mortgage of immovable property worth 125% of the loan amount is also accepted by the bank

Eligibility

  • The borrower should be running a Manufacturing unit in the MSME category
  • The loan amount can be used to meet Working Capital needs

Borrower Contribution to Total Cost (Margin Money)

  • The bank does not charge margin money for this loan

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

Processing Charges

  • As of February 2020, this information is not available on the bank’s website. Please get in touch with the bank for this information 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 with a maximum of up to Rs. 10,000 for Working Capital Loans and 0.75% of loan amount with a maximum of 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 per lakh with a maximum of 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]