Canara Loan Scheme for Reimbursement of Investment Made in Fixed Assets by MSMEs

Find all the information you need on Canara Bank’s Loan Scheme for Reimbursement of Investment Made in Fixed Assets by MSMEs

Canara Loan Scheme for Reimbursement of Investment Made in Fixed Assets by MSMEs

This loan allows businesses in the MSME sector to get a reimbursement of investment made in acquiring Fixed Assets (excluding Land and Buildings) and Capital Expenses incurred on the same within 6 months of such purchase. The maximum loan amount sanctioned under this loan scheme is Rs. 50 lakh for new machinery and Rs. 15 lakh for second-hand machinery purchased within 2 years from the original date of purchase.

Features of Loan Scheme for Reimbursement of Investment Made in Fixed Assets by MSMEs

Why this Loan?

  • The loan is meant for businesses in the MSME sector who are looking for reimbursement of investment made in acquiring Fixed Assets excluding Land and Building and Capital Expenditure incurred within 6 months of the purchase
  • This loan can be availed on purchase of a pre-owned Fixed Asset if it is acquired within 2 years from the original date of purchase

Loan Amount

  • The maximum loan amount sanctioned under this loan scheme is Rs. 50 lakh for new machinery
  • The maximum loan amount sanctioned is Rs. 15 lakh for second-hand machinery purchased within 2 years from the original date of purchase. The minimum loan amount is Rs. 10 lakh
  • The quantum of loan depends on the written down value in the financial statement or market price, whichever is lower

Interest

  • As of February 2020, these details are not available on the bank’s website

Repayment

  • These loans need to be repaid in 5 to 7 years in monthly, quarterly or half-yearly instalments
  • The repayment moratorium for this loan is not mentioned on the bank’s website

Security Needed

  • Canara Bank asks for hypothecation of assets created out of the loan as Prime Security
  • The bank also asks for CGTMSE coverage as Guarantee Cover

Eligibility

  • Businesses in the MSME sector looking for reimbursement of investment made in acquiring Fixed Assets (excluding Land and Buildings) and Capital Expenditure incurred thereon within 6 months of the purchase are eligible for this loan
  • This loan can be also be availed on purchase of a pre-owned fixed asset as well if it is acquired within 2 years from the original date of purchase

Borrower Contribution to Total Cost (Margin Money)

  • Canara Bank takes a 25% margin for investment made for the purchase of a brand new asset and 50% for investment made for the purchase of a second-hand asset

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

Service Charges

  • Loans up to Rs. 5 lakh: The bank does not levy service charges on Working Capital Loans or Term Loans for loan amounts of 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]